Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

BRITISH RAILWAYS BILL

Order read for consideration of Lords amendments.

Motion made, and Question proposed, That the Lords amendments be now considered.

Sir Bernard Braine: On a point of order Mr. Speaker. May I, through you, inquire whether the promoter of the Bill is present and can give the House the assurance, for which I asked verbally on a previous occasion, that the offensive Clause 6 of the previous Bill has been withdrawn?

Mr. Speaker: Order. I think I must first put the Question.

Question put and agreed to.

Sir Bernard Braine: Mr. Speaker—

The Chairman of Ways and Means (Mr. George Thomas): Mr. Speaker, in

Clause 6 one new work, Canvey Island, in subsection (1) is abandoned.

Lords amendments considered and agreed to.

MERSEYSIDE METROPOLITAN RAILWAY BILL (By Order)

Order for consideration, as amended, read.

To be considered upon Tuesday next.

BRITISH RAILWAYS (No. 2) BILL (By Order)

Order for Second Reading read.

To be read a Second time upon Tuesday next.

LONDON TRANSPORT BILL (By Order)

Order for Second Reading read.

To be read a Second time upon Tuesday next.

GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)

Order for Second Reading read.

To be read a Second time upon Thursday next.

Oral Answers to Questions — EDUCATION AND SCIENCE

School Building Programme

Mr. Duffy: asked the Secretary of State for Education and Science when he expects to be able to announce the allocations for the school building programme for 1975–76 for the Yorkshire and Humberside Region.

The Under-Secretary of State for Education and Science (Mr. Ernest Armstrong): My Department wrote to local education authorities on 27th January informing them of their lump sum authorisations for school building in 1975–76.

Mr. Duffy: Is my hon. Friend aware that no region has more pupils per teacher in secondary schools than Yorkshire and Humberside? Although there are doubtless many factors involved, and therefore many explanations, is he quite sure that one explanation is not the amount and quality of accommodation at secondary school level in Yorkshire and Humberside?

Mr. Armstrong: Yes, I am aware of the problems. The building allocations are very largely related to basic need—that is, for children who would otherwise have no school to attend. Of this year's allocations Yorkshire and Humberside, although it has only 8·9 per cent. of the population, has 9·5 per cent. of the overall building allocation.

Mr. Skinner: Is my hon. Friend aware that whereas in South Yorkshire and Humberside the problem may be one of pupil-teacher ratio, in North Derbyshire and in my constituency in particular it is a question of having a large number of pre-1903 slum infant and junior schools? Is he aware that in Whitwell in particular, which was subject to cuts as a result of the intervention by the present Leader of the Opposition in her former guise as Secretary of State for Education and Science in November 1973, pupils are still having to walk many miles every week in order to get their meals and to go to the sports hall? We have a name on the school building but

we have no school. Will my hon. Friend get the matter restored as quickly as possible?

Mr. Armstrong: Yes, I am aware of the acute difficulties to which my hon. Friend has drawn my attention previously. He has highlighted the problem that no two authorities are the same. They all have their different problems. That is why the building allocation is now a lump sum allocation so that priorities can be decided at local level instead of in Whitehall.

School Transport

Dr. John A. Cunningham: asked the Secretary of State for Education and Science whether he will publish an analysis of the views of the local authorities which have now made their representations to him on the matter of school transport; and if he will make a statement.

Mr. Hicks: asked the Secretary of State for Education and Science when he hopes to announce his decision in respect of the recommendations of the interdepartmental inquiry on school transport; and if he will make a statement.

Mr. Stanley: asked the Secretary of State for Education and Science what representations he has received on the non-implementation of the working party's report on school transport.

Mr. Armstrong: My right hon. Friend will take full account of the views expressed by local authorities about school transport, which I know is a subject of concern in many quarters. The problems are complex and I am not yet able to say when it will be possible to make a statement. I do not think that publication of an analysis of the views submitted by the various bodies would be helpful.

Dr. Cunningham: Is my hon. Friend aware that we have now been waiting since the previous Conservative administration were in office for a decision on this matter? Is he further aware that particularly in rural areas with low family incomes the ever-increasing impact of school bus fares is having a very deleterious effect? We have been patient, but will my hon. Friend now assure us that


we are soon to have a decision on this subject?

Mr. Armstrong: Yes, I recognise the concern of the House and I regret that we have not yet come to a final decision. That is because we are trying to find the right answer. Only last week I visited a local authority where there are small rural schools. I found that the authority was spending £1½ million a year on transport. That is an indication of the serious concern that is felt in the country and of our desire to get things done properly.

Mr. Hicks: Will not the Minister show more urgency about the situation? Does he not agree that the circumstances and conditions that were relevant at the time the existing regulations involving the present statutory limits came into being are now totally out of date? Further, in the case of rural areas in particular does he not agree that a more flexible and wider system involving meaningful parental contribution should be introduced urgently?

Mr. Armstrong: Yes, I am well aware of the sentiments expressed by the hon. Gentleman. Over the past five years the expenditure by local authorities on school transport has increased from £20 million to no less than £45 million. If the hon. Gentleman adds to that the substantial amount now being paid by parents, he will get an understanding of the serious problem that we face. We are treating the matter urgently, but there is no easy answer. The money has to be found. We want to protect parents and to ensure that parental contributions are not a deterrent in getting their children to school.

Mr. Tomlinson: While I understand the pressure on public expenditure, may I ask whether my hon. Friend accepts that the present arrangements are setting neighbour against neighbour and community against community and that something serious has to be done? I believe that there should be urgent consideration of a systematic and uniform entitlement to transport for all schoolchildren.

Mr. Armstrong: I would not disagree with anything that my hon. Friend has said on this matter. The solution proposed by the working party—namely, that the same amount should be paid by all parents whether they live half a mile, five

miles or seven miles from school—would also set neighbour against neighbour. There is no easy answer. We are trying to find the right answer. I hope to make a statement to the House in the near future.

Mr. Stanley: Has the Minister accepted the principle of the working party's report that the existing two- or three-mile limit system should be replaced by a system of flat-rate charges? Will he bear in mind that a flat-rate charge would not set neighbour against neighbour and that, unlike the present means of financial support, it could be rebated in the case of less-well-off families?

Mr. Armstrong: No, we have not yet accepted the recommendations made by the working party. We are still discussing the matter with the local authorities. There is a great deal of controversy about the particular recommendation to which the hon. Gentleman refers.

Dr. Edmund Marshall: In view of the prolonged delay in these matters, will the Minister encourage local education authorities to follow the example of Humberside County Council? Is he aware that that council has used its present discretionary powers in respect of school transport to provide special transport for secondary school children from Old Goole in my constituency from 1st January this year?

Mr. Armstrong: Indeed, we are collecting evidence of good practice in various parts of the country. Local authorities have wide discretion. I remind the House that local authorities are also strained in their resources. There is no simple answer. In fact, every answer is a very expensive answer.

Sir G. Sinclair: Is not the Minister weary of sitting on this report for a whole year? Does he not realise that this delay is causing hardship both for local authorities and for parents and that that will continue to be the position until he can lay down the principles on which the Government set out to improve bus services for schoolchildren? In particular, will he hasten to help the rural areas, where this problem is often the most serious?

Mr. Armstrong: There are plenty of urban areas that have serious complaints


about the impact of transport costs. Of course I am weary. I would like to find the answer but there is no quick, slick solution. We are searching for the right answer.

Public Expenditure

Dr. Hampson: asked the Secretary of State for Education and Science if he will make a statement on the substantial reduction in expenditure promised in the current expenditure White Paper compared with the 1973 White Paper.

The Secretary of State for Education and Science (Mr. Reg Prentice): No, Sir. Pages 94–97 of the White Paper "Public Expenditure to 1978–79" provide ample comment on the Government's plans for education expenditure.

Dr. Hampson: Does not the right hon. Gentleman agree, particularly in the light of research that has appeared in The Times Higher Education Supplement, that of all spending Departments Education is to gain the least from the present Government? Further, does he not agree that there has been a collapse in growth in real terms, as forecast, which is related in no way to the cuts of December 1973 or to the fall in the birth rate but to a change of Government priorities? Does not that show up as a total cover-up the Prime Minister's speech in Newcastle on 21st February? What is the right hon. Gentleman's strategy for distributing the cuts?

Mr. Prentice: The White Paper that we have recently published provides for a growth rate in real terms of about 2¾ per cent. a year over a five-year period. If the hon. Gentleman compares that White Paper with the White Paper issued by the previous Government in 1973, he should bear in mind that on the very day that the December 1973 White Paper appeared the then Chancellor of the Exchequer announced substantial cuts. The result was that that White Paper was strangled at birth. In the sense that our White Paper represents lower figures, this is partly due to those cuts and partly due to a new demographic trend which has become apparent since then.

Mr. Bryan Davies: May I ask my right hon. Friend to disregard the hypoc-p
risy that comes from the Opposition? Is he aware that while continually emphasising the need for reduction in public expenditure they continually seek to identify programmes that involve such expenditure for the Government? Does my right hon. Friend recognise that many of his right hon. and hon. Friends are extremely concerned by the implications of the public expenditure programme? Is he aware that it appears as if the Government may be in danger not so much of pigeon-holing but of burying the Russell Report on adult education?

Mr. Prentice: All of us share a common desire to see faster progress towards our education objectives. I repeat that the White Paper we have recently published represents a growth rate in real terms. That is not as fast a rate as any of us would wish, but it is not true to describe it as cutting education expenditure. It is a programme for slow but steady growth.

Mr. St. John-Stevas: Speaking as one economic illiterate to another, would I be wrong in assuming that there would be much more cash available for education if less money had been wasted on the municipalising of housing and if there had been a more faithful observance of the social contract?

Mr. Prentice: It is of vital importance that we should have a coherent housing programme as well as a coherent education programme. Therefore, I do not agree with the hon. Gentleman's first point. As for adherence to the social contract, I believe strongly in that and in recent days I have made my views on that matter very clear.

Mr. Russell Kerr: Has my right hon. Friend made any calculation of the effect on the social contract of the recently announced 25 per cent. increase in the cost of school meals?

Mr. Prentice: The increase that will take place later in the price of school meals will add a very small part of 1 per cent. to the cost of living. Of course I regret doing that, but in a time of rapid inflation I do not think we can expect the price of school meals or anything else to remain at precisely the same level year after year.

Schools (Reorganisation and Closure)

Mr. Beith: asked the Secretary of State for Education and Science what weight he attaches, when considering schemes for the reorganisation of secondary education and proposals for the closure of village primary schools, to any consequent additional costs for the transport of children.

Mr. Armstrong: My right hon. Friend takes into account all relevant factors, of which additional transport costs may be one, in his consideration of proposals under Section 13 of the Education Act 1944, as amended, and gives them due weight.

Mr. Beith: Does the Minister recognise that in areas such as Northumberland the reorganisation and closure of village schools tends to lead to bussing on a grand scale, with children travelling 15, 20 or 25 miles a day? Does he recognise that as well as the social disadvantages of such a system the cost should be weighed in the balance when the economics of village schools and small local schools are being considered?

Mr. Armstrong: Yes, I recognise the factors that the hon. Gentleman has mentioned. I remind him that the initiative for the reorganisation or the closure of any school comes from the local authority and that my right hon. Friend takes into consideration all matters. Of course, the overriding consideration is the educational well-being of the children in the area.

Mr. George Rodgers: Is my hon. Friend aware that in many areas, and certainly in my constituency of Chorley, the bus companies have refused to harmonise their concessionary fares to scholars with the raising of the school leaving age? As there has recently been an increase of 30 per cent. in the cost of public transport, does not my hon. Friend think that remedies should be applied in this direction?

Mr. Armstrong: This is a matter we have in mind when discussing the wide issues of transport policy which were raised in a previous Question.

Reading Ability (Bullock Report)

Dr. Boyson: asked the Secretary of State for Education and Science what action he intends to take to secure the implementation of the recommendations of the Bullock Report on the reading ability of children.

Mr. Bryan Davies: asked the Secretary of State for Education and Science if he has made a study of the Bullock Report on the reading ability of children; and whether he will make a statement.

Mr. Prentice: I would refer to the reply I gave to a Question by my hon. Friend the Member for Lewisham, West (Mr. Price) on 18th February 1975.—[Vol. 886, c. 356–7.]

Dr. Boyson: Does not the Secretary of State agree that among the 332 recommendations, 17 of which concern the primary sector, there is no emphasis on the return of the infant school in particular to the teaching of literacy as its primary purpose, which is a view that is held by many of us on this side and by hon. Members on the Government side too?

Mr. Prentice: This very distinguished report, which deserves to be read widely and closely and to be discussed throughout the whole teaching profession, placed emphasis on the need for improved training in language ability at all levels of education, including the infant stage.

Mr. Davies: Does my right hon. Friend agree that very few of the 332 recommendations of the Bullock Report bear out the assertions of the Opposition that standards are substantially declining in primary schools? Does he accept, however, that what the Bullock Report identifies is the necessity for a greater concentration of resources in schools and areas where the children are most socially disadvantaged?

Mr. Prentice: On the latter part of my hon. Friend's question, the Government have taken many steps to remedy matters. On the former part, I agree that the Bullock Report demolished many of


the scare stories which had been current about the declining standards, but it went on to say—I agree with it strongly—that standards are not good enough and never have been, and therefore a concerted effort must be made to improve them.

Miss Fookes: What steps does the Minister intend to take to improve the training of teachers, since the Bullock Report states that the good teacher is the most important single factor?

Mr. Prentice: This Government have done many things to improve the status and morale of the teaching profession, including the highest pay increase in the history of the profession. There are many recommendations of the Bullock Report which will apply to the curriculum and the content of training courses for new teachers and I am sure that they will be closely studied in colleges of education.

Mr. Guy Barnett: Is my right hon. Friend aware that this report will do an immense amount for the morale of the teaching profession and is the key to restoring confidence in our educational system amongst the public in general, particularly amongst parents? Is he aware also that the report, if it is to be implemented,—I believe it to be one of high priority—will involve the expenditure of money so that the monitoring and screening proposals can be implemented? What has he to say about that?

Mr. Prentice: There are many aspects of the report and many of the 332 recommendations which can be implemented without extra expenditure. There are others which can be implemented with very modest expenditure. All the recommendations need to be studied carefully by the teaching profession, by local authorities and by my Department, and this process is going ahead rapidly.

Mr. St. John-Stevas: I welcome the report, which confirms so much of what the Opposition have been saying about standards over the past 12 months, but may I join in the plea made by the hon. Member for Greenwich (Mr. Barnett) that the Secretary of State should give priority to the monitoring system? May I ask him to go further and introduce national standards of reading, writing and mathematics so that we can know exactly what are the achievements

in a school and what are the shortcomings?

Mr. Prentice: I certainly would not accept the latter proposition without much more consultation with everyone concerned. On the question of monitoring, the assessment of performance unit which I have established within the Department is urgently studying the recommendations of the Bullock Report on this point. I hope to receive the unit's advice shortly.

School Leaving Date

Mr. McCrindle: asked the Secretary of State for Education and Science what progress he is making in his consultations about introducing greater flexibility into the school leaving age.

Mr. Lawson: asked the Secretary of State for Education and Science whether he is now able to make a statement on his policy on the school leaving age.

Mr. Andrew F. Bennett: asked the Secretary of State for Education and Science if he is now in a position to make a statement about legislation on a common summer leaving date for school leavers.

Mr. Prentice: I stand firmly by the raising of the school leaving age to 16 and have no plans to alter this. As I told my hon. Friend the Member for Stockport, North (Mr. Bennett) on 4th February—[Vol. 885, c. 450.]—there is no prospect of legislation in the current Session affecting the summer leaving date this year. I am still studying the question in relation to future years and will make an announcement in due course.

Mr. McCrindle: Is the Secretary of State aware that there are thousands of teachers who have borne the difficulties arising from the raising of the leaving age—I think that the Secretary of State concedes this—and who are very anxious for an early announcement indicating that at the very least it will become possible in 1976 for 15-year-olds to leave school immediately after taking the examinations? Is there any prospect of the Secretary of State making an announcement to that effect in the near future?

Mr. Prentice: I am considering all the advice I have on this from teachers' organisations and many other quarters.


The advice does not all point the same way. It is a complex question. I shall make an announcement as soon as possible.

Mr. Flannery: Does my right hon. Friend agree that the position in regard to the raising of the leaving age will stabilise itself and be accepted as time passes? Does he agree also that it is characteristic of Tory Members that, although they would never dream of lowering the school leaving age for their own children, they are constantly trying to lower it for the mass of the people?

Mr. Prentice: I agree with my hon. Friend that already this year the raised leaving age is more acceptable to the age group concerned than it was 12 months ago, and in successive years the raised age will become accepted as a matter of course. I believe that the lesson of the first year that the majority of children benefited from the extra year at school, but in so far as mistakes are made in some areas experience will teach the schools how to recover from those mistakes and we shall see an improving result from this long overdue reform in the future.

Mr. Lawson: Does not the Secretary of State agree that since economic conditions and Government policy together are calling for a massive reduction in the rate of increase of public expenditure—local authority expenditure particularly, and notably on education, from which my county of Leicestershire is suffering—economies have to be made? Would it not be sensible to look again at the question of the raising of the school leaving age, which I accept is a commitment but which is a mixed blessing? If the Secretary of State goes back on this commitment in the light of economic conditions, will he accept an assurance that this will not be regarded as welshing?

Mr. Prentice: I believe that all the parties were right to enter into the commitment. It is a great pity that we had to wait so long before that commitment was implemented. It would be a very retrograde step ever to go back on it, and it is no part of my policy to consider doing so.

Mr. Hooley: I entirely support my right hon. Friend's stand against

any fiddling about with the school leaving age. Does he agree that there might be more flexibility between schools and further education colleges in teaching children of the age of 15 or 16?

Mr. Prentice: Yes. There has been some welcome progress in this direction in recent years, and I hope that it will increase. I strongly agree that there is great scope in many areas for greater co-operation between the further education system and the schools.

Sir John Hall: Is the Secretary of State aware that at a recent consultation between the secretaries of schools and headmasters in my county of Buckinghamshire the growing truancy in schools was attributed largely to the increase in the leaving age? Although the headmasters concerned would not wish the leaving age to be reduced—here I agree with the right hon. Gentleman—they nevertheless thought that the times at which 16-year-olds can leave should be reduced from twice a year to once a year—namely, in May of each year—which would ease the problem.

Mr. Prentice: I do not exactly regard Buckinghamshire as the major source of enlightenment on education matters. Nevertheless, I take the point that teachers all over the country are discussing the practical implications of possible flexibility in the school leaving date within the summer term. In reply to earlier supplementary questions I said that I was giving urgent consideration to this matter.

Rainow Church of England Junior School

Mr. Winterton: asked the Secretary of State for Education and Science whether he will take exceptional steps to include the proposed Rainow County Junior School and Infants School in an early building programme on account of the overcrowding, fire hazards and highway dangers of the existing Rainbow Churh of England Junior School.

Mr. Armstrong: No, Sir. Under the terms of my Department's Circular 13/74, it is for the local education authority in the first instance to decide which projects should be started within its lump sum building authorisations.

Mr. Winterton: I thank the Minister for his reply. Does he agree that a village which is expanding very fast and into which many new families with young children are moving should be considered as a priority? Does he consider that a totally inadequate school which opens on to a dangerous road with a very narrow pavement should justify a priority too? Does he consider that a school with no playing facilities puts children moving on to the secondary sector at a severe disadvantage?

Mr. Armstrong: Yes, this is a school I want to see replaced as quickly as possible. The Cheshire authority has been allocated £3,712,000 in the 1975–76 building year. That is mostly for basic needs, but it is for the authority to decide the relative merits of this school and others within its area.

Further Education

Mr. Thorne: asked the Secretary of State for Education and Science if he will take special steps, in view of the intention of local authorities to reduce their further education expenditure, to ensure that any progress made in extending day release for young workers can be met by the resources available in the colleges of further education which such young workers would attend.

Mr. Prentice: I am not aware that local authorities generally have decided to reduce their expenditure on further education. The rate support grant settlement for 1975–76 allows provision for the expected increase in the number of students in maintained colleges of further education in the coming year. I am anxious that opportunities for the continued education of young people in employment should be improved, and I am discussing with interested bodies possible ways of making practical progress in difficult economic circumstances.

Mr. Thorne: Is my right hon. Friend satisfied that the local authorities can meet all the needs of the further education sector in view of the Chancellor of the Exchequer's call for a reduction in revenue expenditure and the restrictions placed on capital projects? Does he consider that lower expenditure on education is part of the social contract?

Mr. Prentice: As I explained earlier, there is rising expenditure on education, and the education element in the rate support grant for 1975–76 allowed both for an increased number of students in further education and for some modest improvement in non-teaching costs. It is therefore not true to say what my hon. Friend said. I think we can see some progress here. In some areas, though not all, there are empty seats in classrooms in further education colleges and I would like to see these filled with extra students since that could be done without extra cost.

Dr. Hampson: Since the Government have asked local authorities to cut back on expenditure, and since education is now at the bottom of the Government's priority list of expenditure forecasts, how does the right hon. Gentleman justify asking local authorities to make reorganisation of secondary education their number one education priority? This lack of strategy and lack of guidelines will cause indiscriminate cuts and great damage to the system.

Mr. Prentice: I tried to explain earlier that education was not at the bottom of the Government's priorities. If the Conservatives had won the last election, however, it would have been at the bottom of theirs. It was a very important part of the Conservative election campaign to call for cuts in public expenditure with the exception of housing, pensions and agriculture. So education clearly was due for considerable cuts, and the country has been saved from that by the continuation in office of a Labour Government.

Mr. Spearing: Does my right hon. Friend agree that in spite of the welcome increase in education expenditure in polytechnics and technical colleges there is a distinct danger of valuable courses which cost very little being cut in order to maintain other more prestigious courses which appeal to the nominally better-qualified teachers? Will my right hon. Friend look at this as it affects the efficacy of the school leaving age programme and those not going for the more scholastic certificates and degrees?

Mr. Prentice: Both in our capital allocations and in all our policies we are


tending to favour the local authority sector of higher education rather than universities and, within that, to give all possible priority to non-advanced work such as that provided for those on day release and further education courses.

Sir John Hall: Is the Secretary of State aware that, if the local authorities are to meet the Government's request that rate increases in the coming year should be restricted to no more than 25 per cent., there will inevitably be a cut in education expenditure in real terms? The target cannot be achieved in any other way. How does the right hon. Gentleman answer that point?

Mr. Prentice: No, Sir. The rate support grant settlement was negotiated between the Government and the local authority associations on the basis that rate increases should be confined within the limits laid down and that expenditure increases should be confined to inescapable commitments. The education component of that envisaged growth in real terms of 4 per cent. and the further education component, which is the subject of the Question, envisages increased student numbers and some modest improvement in standards.

Mr. Gwilym Roberts: I accept most of the things my right hon. Friend has said, but is he aware that there is very real concern among people who are involved in these matters that cuts are taking place in post-16 education in general? Does he accept that post-16 education is particularly vulnerable in times of economic stringency compared with the mandatory pre-16 sector?

Mr. Prentice: I accept that it is a particularly vulnerable sector because it is not mandatory. I would like to put on record that I would greatly regret the policy of any local education authority which involved economies at the expense of those in the 16 to 19-year age group in employment who still have educational needs as important to them as the needs of those who go on to full-time higher education.

Mr. Christopher Price: Is my right hon. Friend aware that the needs of this age group were amongst the top four priorities in two successive Labour manifestos last year? So far the Government have not brought forward any specific

proposals to fulfil either manifesto pledge. When are we going to do so?

Mr. Prentice: I have made it clear that within the framework of the rate support grant we have made a better provision than many hon. Members realise. I am consulting a number of bodies about long-term changes. They include the TUC education committee, the ATTI, the City and Guilds of London Institute, the Association of Metropolitan Authorities and others. I am exchanging views with them about the future pattern of provision for this important age group.

Secondary Education (Trafford)

Mr. Churchill: asked the Secretary of State for Education and Science what discussions he has had with representatives of Trafford in regard to the implementation of a comprehensive system of secondary education; what is the capital cost involved in achieving this changeover; and how soon its share of the necessary resources will be made available by central Government.

Mr. Armstrong: My right hon. Friend has had no such discussions with representatives of the authority. He expects to receive shortly the authority's response to Circular 4/74 which called for information about the measures to be taken for comprehensive reorganisation. That circular stressed the importance of making the maximum use of existing buildings and available resources. I cannot yet say what resources will be available for school building in 1976–77 and later years.

Mr. Churchill: Is the Minister aware that the estimated cost of imposing a comprehensive scheme in the Trafford district of Manchester is no less than £4 million, which will fall squarely upon the ratepayers? Is he aware that this is more than eight times as much as the total available for all capital expenditure on education in the coming year? In the circumstances, is he satisfied that the Government have their priorities right in pursuing this element of doctrinaire Socialism when in the case of the Trafford district—[HON. MEMBERS: "Too long."]—one-fortieth of this expenditure would provide a replacement school for St. Bride's Primary School, which is 100 years old and which has already been condemned as structurally unsound?

Mr. Armstrong: I am not aware of the cost of the proposals from the Trafford authority because as yet we have not received the proposals from the authority. As for our priorities, for far too long most of our resources have gone to the gifted and privileged children at the expense of those who are disadvantaged and less gifted. Because we want to get rid of the unfair and wasteful system of selecting children, this is our highest priority—

Mr. Churchill: What about St. Bride's?

Mr. Armstrong: —and we are expecting a quick response from the hon. Member's authority.

Mr. Marks: Some of the authorities which have submitted their plans hope to go comprehensive in September next year. Will my hon. Friend's investigations be complete in time for them to do so?

Mr. Armstrong: Yes, Sir. We have in mind the desire of most authorities to abolish selection as quickly as possible. We shall deal with all Section 13 proposals as expeditiously as possible.

Mr. St. John-Stevas: May I repeat the Opposition's plea to the Minister for a moratorium on the policy of compulsory comprehensivisation of schools? Does he not realise that by insisting on reorganisation and providing no money to do it he is not only lowering standards but bringing the whole idea of the comprehensive school into disrepute?

Mr. Armstrong: I reject the hon. Gentleman's suggestion outright, I remind him of a distinguished predecessor of my right hon. Friend, Lord Boyle, who said that the greatest fact in British education was the waste of talent. Waste of talent occurs because we label and segregate our children.

Nursery Education (Hampshire)

Mr. Gould: asked the Secretary of State for Education and Science what action he is proposing to take in respect of Hampshire County Council's grant for nursery school building in the light of its intention to cut back its programme for 1975–76.

Mr. Armstrong: My Department authorises capital building for nursery

education provision in local authority areas and the rate support grant takes account of the costs incurred. The Hampshire County Council has informed my Department that it does not intend to carry out any nursery education building in 1974–75 or 1975–76 although its allocation from the resources available over the two years totalled £1,105,000. As I have already made clear, these resources will be made available to other authorities able and willing to use them for nursery education building.

Mr. Gould: Is my hon. Friend aware that in Hampshire only one child out of 40 attends nursery school, compared with the national figure of one in nine? Does he agree that Hampshire County Council's refusal to accept its allocation for nursery school building will further prejudice Hampshire schoolchildren in this respect and that if that is to be avoided in the light of the priority the Government give to nursery education, further Government action is needed?

Mr. Armstrong: Yes, Sir. It is difficult for the Department to intervene. I agree with my hon. Friend that hundreds of thousands of children are born to fail. To compensate for that we must have more pre-school education. I very much deplore Hampshire's attitude. I am glad to say that 57 other authorities have willingly applied for the resources that Hampshire does not want to use.

CLASP-built Schools

Mr. Radice: asked the Secretary of State for Education and Science if, in the light of recent evidence, he will issue fresh guidance to local authorities about fire hazards associated with CLASP-built schools.

Mr. W. E. Garrett: asked the Secretary of State for Education and Science whether, in view of further instances of serious fires in schools built on the CLASP system, he will now take specific action to ensure greater safety of existing schools built under this system and to ensure that future methods of school construction ensure maximum safety.

Mr. Armstrong: My Department's current requirements for fire precautions, framed in consultation with other Government Departments, set high standards for new schools of all kinds. Decisions


to improve the fire resistance of existing schools require local knowledge and are for local determination. My Department wrote to all local education authorities on 9th January to remind them of basic fire precautions in schools.

Mr. Radice: I thank my hon. Friend for that answer, which will go a long way towards allaying public anxiety. Is he aware, however, that some existing schools built on the CLASP system have a gap between the roof and the ceiling which can be a fire hazard? What advice is he giving to local authorities about the problem and about the prevention of arson?

Mr. Armstrong: In Building Bulletin No. 7 we have referred to the urgent need for fire-stopping in floor and roof cavities. The CLASP buildings are a major concern of ours. Local authorities are responding and are spending money to remedy pre-1971 schools. Of the 32 school fires that have occurred in the North-East recently, seven were in CLASP buildings.

Mr. Garrett: Will my hon. Friend accept my assurance that I and many of my colleagues from the North-East are very satisfied with the work that has been done to ensure that satisfactory reply?

Mr. Armstrong: I am grateful to my hon. Friend.

SOCIAL CONTRACT

Mr. George Gardiner: asked the Prime Minister whether the public speech by the Secretary of State for Employment on 14th February at Ebbw Vale on the subject of the social contract represents Government policy.

Mr. Peter Morrison: asked the Prime Minister whether the Secretary of State for Employment's public speech at Ebbw Vale on the social contract on Friday 14th February represents Government policy.

Mr. Hurd: asked the Prime Minister whether the public speech by the Secretary of State for Employment on the social contract at Ebbw Vale on 14th February represented Government policy.

The Prime Minister (Mr. Harold Wilson): Yes, Sir.

Mr. Gardiner: The right hon. Gentleman will be aware that the Secretary of State for Employment has since developed his theme. As the Prime Minister, by virtue of his own frequent appeals for restraint in pay claims within the social contract, must be classed as an economic illiterate in his right hon. Friend's eyes, will he take this opportunity to express his full support for those of his Cabinet colleagues, such as the Secretary of State for Education and Science, who seek in their speeches to underline the wage responsibilities of the social contract, or will the Prime Minister, too, welsh on those responsibilities?

The Prime Minister: While the matter does not technically arise on this Question, as the speech referred to was about the miners' settlement, I am happy to say, on the point raised by the hon. Gentleman so touchingly and movingly, that the House can leave it to me to ensure that the normal rules in these matters are observed. [An HON. MEMBER: "What rules?"] The rules of every Government in this country. But while my colleagues and I have been urging for months, before both trade union and other audiences, compliance with the social contract guidelines, I must tell the House—and I want this to be understood—that no Minister has at any time over those months proposed any alternative policy to the social contract. [Interruption.] Certainly no Minister has proposed a return to the disastrous policies of a year ago this week, based on statutory controls and the three-day week. I thought that what I said would be cheered by Opposition Members, because I am glad to feel that on this matter there is total bipartisanship in the House. I understand that the right hon. Lady the Leader of the Opposition has now forsworn the statutory pay policy of her predecessor which she supported when in government.

Mr. Kinnock: Does my right hon. Friend appreciate that no useful advice is to be gained on policy of any kind from the economic sub-literates on the Opposition benches, and that far from unemployment, as offered by them, and statutory incomes policy, as undertaken by them, being the cure for our economic


problem, that problem and the problems of our democracy can be overcome[HON. MEMBERS: "Too long."]—only by means of persuasion and example, which are the basis of the social contract?

The Prime Minister: I must say with regret that I disagreed with what my hon. Friend said at the beginning of his question. It is wrong to say that we cannot learn from the Opposition. We can learn from their experience, as they have now done. But I join my hon. Friend in expressing great anxiety about what have clearly become the Conservatives' policies, although they have not yet been made articulate—monetarist policies which can lead only to unemployment.

Mr. Morrison: Is the Prime Minister aware that the Secretary of State's speech was also about the social contract? Is he or is he not satisfied that the convention of collective Cabinet responsibility still exists in regard to the social contract?

The Prime Minister: Certainly. Many of my right hon. Friends and I have been urging compliance with the social contract over many months. But if I want to study collective responsibility I will not look at the Opposition benches—[HON. MEMBERS: "Answer."]—because for precisely three weeks the Opposition Front Bench has been dissociating itself from everything it did under the previous Prime Minister.

Mr. Lipton: Will my right hon. Friend put a guillotine on his answers to the silly questions asked by the Opposition? I should like to know whether my right hon. Friend will be visiting Beckermet.

The Prime Minister: I know that my hon. Friend, with his long experience and wisdom in these matters, can put a correct evaluation on the quality and motives of the questions of hon. Members opposite. I shall get to Beckermet when the relevant Question is asked.

Mr. Hurd: Is it not just possible that the Secretary of State for Education and Science is right? Why is it that after one year of the social contract as administered by the Prime Minister and the Secretary of State for Employment we have in this country a rate of inflation which is far higher than that of any of our competitors—twice that of the United States and three times that of Germany?

The Prime Minister: In so far as my hon. Friend was following the speeches which I made, from the TUC onwards last September, urging compliance with the contract, he was expressing the view of all of us and, I should hope, of the whole House since the Opposition have rejected any alternative policy.
The figures which were published last month were inflated by the Tory Government's thresholds—[HON. MEMBERS: "Oh."]—which throughout the election I said I supported; they are a very considerable proportion of this. Secondly, the figures include long overdue settlements, which I have not heard criticised by any right hon. or hon. Gentlemen, for people such as nurses and teachers who had been left behind and who received back pay for anything from eight to 10 months. The hon. Gentleman must study the figures before he asks questions about them.

Mr. Edwin Wainwright: Will my right hon. Friend cut down his replies to the Opposition's ridiculous supplementary questions? Does he realise that they do not want the social contract to succeed? Therefore, will he bear in mind that if any disagreement arises between my right hon. Friends he must advise them not to express it in public?

The Prime Minister: My hon. Friend is right in what he says about the Opposition's motives. But they have no alternative policy. As there have been suggestions this afternoon of a certain marginal crossing of ministerial lines, I feel a deep sense of responsibility to engage in some educational help for Opposition Members.

Mrs. Thatcher: Bearing in mind that in answer to a Question in November the Prime Minister said that all his Ministers were responsible for the social contract, may I ask whether the Friday speech of the Secretary of State for Education and Science represented Government policy?

The Prime Minister: So far as it involves support for the social contract, yes. So far as it has been interpreted, rightly or wrongly, as proposing other alternative policies, I am happy to say that my right hon. Friend at no point, in public or elsewhere, has advocated an alternative policy.

Mr. Thorpe: As no one suggests that the Secretary of State for Education and Science was proposing an alternative policy but was merely suggesting that the present policy was not working, and as the Secretary of State for Employment said that the social contract was the best shield against worsening inflation and rising unemployment, and as many of his colleagues have said that it is not working, what measures does the right hon. Gentleman propose to back up his Ministers who are trying to make it work?

The Prime Minister: The social contract is the right policy. I have not heard an alternative policy from the official Opposition, and I am glad that they have repudiated the policy which they were following a year ago. I pay this tribute to the right hon. Member for Devon, North (Mr. Thorpe). He at least has produced an alternative policy. He supports a statutory policy. The Opposition have thrown over what they supported in office. I congratulate the right hon. Gentleman. I think he is wrong, but at least he is showing more honesty than the official Opposition.

NATIONAL ECONOMIC DEVELOPMENT COUNCIL

Mr. Duffy: asked the Prime Minister when he next expects to take the chair at a meeting of the NEDC.

The Prime Minister: My right hon. Friend the Chancellor of the Exchequer is chairman of the council. I have said previously that I hope to take the chair about once a quarter, but I have no specific date in mind at present.

Mr. Duffy: Is my right hon. Friend aware that the worsening outlook for capital investment confirmed by yesterday's CBI Industrial Trends Survey can only prolong the recent fall in industrial production and thus add to unemployment? Will he therefore take an early opportunity, such as chairing the NEDC can provide, to put some backbone into business men, pointing out to them that theirs is the responsibility for the present lack of investment because theirs is the crucial rôle, impressing on them that no one, including themselves, can benefit from this state of affairs, and asking them

whether they will start trying to believe once more in themselves?

The Prime Minister: As I have told the House, the NEDC—both sides of industry and the Government—at its last two meetings, and it will happen again tomorrow, has been working on the problem of investment and increased industrial capacity to meet the requirements of world markets in the oil States, in the Soviet Union and elsewhere.
My hon. Friend, and I hope right hon. and hon. Members opposite, will have been encouraged to see the figures published this morning showing that, despite earlier forecasts, industrial investment in manufacturing rose in the fourth quarter of last year. It was 5·4 per cent. up on the fourth quarter of 1973, when the Opposition were responsible for these matters, and 19·9 per cent. up on the fourth quarter of 1972. [Interruption.] In reply to the illiterate muttered supplementary question about prices, may I say that the hon. Member knows that these figures are at constant prices.

Mr. Grylls: If the Prime Minister takes the chair at the NEDC, will he be repeating his speech outlining the Government's achievements, and does he consider the present rate of inflation to be an achievement or a failure?

The Prime Minister: All my speeches from the moment we came to office have dealt with the problem of inflation. Nothing happening today is different from what we were told a year ago—[HON. MEMBERS: "Oh."]—since we were told a year ago today about the likelihood for inflation and for unemployment, except that all of us—I should like the Opposition's support—are struggling to stop the increase in unemployment then forecast which is occurring in most other industrial countries. We have also made more impact on the balance of payments problem.

Mr. Noble: When the Prime Minister meets trade union leaders at NEDC or elsewhere, will he listen carefully to what they have to say about import controls? Will he note that these are a means of improving the balance of payments and preventing unemployment from increasing, particularly in such industries as textiles and footwear?

The Prime Minister: There is a special textile and footwear problem. Hon. Members on both sides of the House are concerned about it, and I have suggested that they should meet my right hon. Friend. I have been in touch with the industry and certain action has been taken, but I know of the anxiety.
I take the view that import controls as a general policy would be bad for Britain from the point of view of dealing with the balance of payments, because they would help to get world trade spiralling further downwards. I point out to my hon. Friend and to those who support him that if we impose physical controls to restrict imports it will not be an alternative to deflation. We reject both policies. We should have to have deflation in order to prevent a big increase in consumption which would frustrate our exports.

Mr. Heseltine: Does not the Prime Minister agree that investment intentions are declining to the worst level ever and that, until we see a new confidence in industry, forward investment will not increase? Does he agree that the terms of the letter which I wrote to him on Friday setting out the instructions that would have to be given to bring the Industry Bill into the terms of the White Paper—as he has promised to do—are the basis of the instructions which he will be giving to parliamentary draftsmen for preparing Government amendments to the Industry Bill?

The Prime Minister: I do not accept any of the points made by the hon. Gentleman. As to the effect of business confidence on investment, the figures have been showing a decline for a very long period. The figure for the fourth quarter is actually up, and I hoped that the hon. Gentleman would say how delighted he was, but that is not in his nature. The intentions for the fourth quarter were worse, but they have improved in reality and I hoped that the hon. Gentleman would be pleased.
The hon. Gentleman will be receiving a reply to the letter he so kindly sent to me, and he will know that I am currently discussing these matters with the CBI and the TUC. I thought I might

perhaps send him a detailed reply because it is plain from his letter that he has totally falsified the position in relation to the Bill. The hon. Gentleman in his speeches and letters should stop thinking in slogans and apply himself to the problems. He will get the reply to his letter, and I hope that he will be a much humbler man when he has read it.

Mr. Bidwell: Does my right hon. Friend agree that, worrying as inflation is, the villain of the piece has been the failure of those with the ability to invest to do so or their preference to invest overseas? Does he agree that, in spite of what he said, this is a continuing worry? Does he think that the policies are sufficient to arrest the tendency and drastically to improve investment?

The Prime Minister: Yes, Sir. I answered that question a week ago, and I dealt with it at some length when discussing these matters with the Scottish TUC last week and on television in Scotland. I said then, and I must repeat, that, as we have said for 12 months and more, the immediate problem of inflation can arise from self-generated income demands—wages, salaries and other incomes outside the employment field. The long-term problem we face is the totally inadequate investment—under successive Governments; I concede that—for about 20 years. That is the basic problem. Had business invested when it should and could have done and had every chance of doing, we should not be as vulnerable as we are to short-term factors.

Mr. William Clark: When the Prime Minister takes the chair will be explain to the council why his Government are steamrollering through the House an iniquitous tax which is ill-understood and which has far-reaching economic consequences, without adequate debate because of the timetable motion?

The Prime Minister: I do not agree with the hon. Member's premise. There have already been about 170 hours of debate. I understand that the House is being asked today to approve other arrangements which will provide adequate time for considering all the nonsense of hon. Gentlemen opposite for another four days.

FINANCE BILL (POINTS OF ORDER)

Mr. Speaker: I wish to say something to the House about what happened when I was in the Chair late last night. I allowed the Leader of the House to make a statement about the business for today, the Finance Bill (Allocation of Time) motion. I thought that that was for the convenience of the House.
An analogy is when the Government of the day are defeated in a Division. On such occasions the Leader of the Opposition sometimes rises on a point of order to ask what are the Government's intentions. That is not really a point of order at all, as I have stated more than once, I think. My practice has been to allow a statement by the Government spokesman and one further question. That is what I did last night. I called the right hon. Member for Yeovil (Mr. Peyton) after the Lord President. I refused to take points of order on the statement because, in my view, there could not possibly be a valid point of order. The Lord President had used parliamentary language, the course which he proposed was in accordance with Standing Orders and no valid question of order could arise.
I must remind the House that the use of points of order to advance arguments or to comment unfavourably or favourably on Government actions is an abuse which is growing in frequency, and it occurs on both sides of the House.
If the House wishes a change of business to be announced in some other way, the Procedure Committee could be asked to examine the matter. That Committee might also consider how the Chair might be helped to deal with points of order.

Mrs. Thatcher: May I thank you very much, Mr. Speaker, for clarifying the position? We were a little worried lest a new precedent should have been created. I understand that it has not, and I am grateful to you.

Mr. Thorpe: I wonder whether the point could be referred to the Procedure Committee, Mr. Speaker? The matters which you have indicated to the House are with precedent, as you rightly said. What the House finds difficult—and it may be a matter for the Procedure Com- 
mittee to consider—is that the House is invited to vote on a matter and a Minister afterwards gives his reasons why it is right that we should have done so. It would be nice if we could reverse the process, as has always been the tradition of the House.

Mr. Speaker: I do not think that that is a matter for the Chair.

Mr. Emery: Thank you for your statement, Mr. Speaker. May I ask you about one aspect of it? Erskine May, on page 430, reads as follows:
it is also the right of any Member who conceives that a breach of order has been committed … to rise in his place, interrupting any Member who may be speaking, and direct the attention of the Chair to the matter, provided he does so the moment the alleged breach of order occurs.
I wish to refer to three remarks which you made last night, Mr. Speaker. For the sake of accuracy I have consulted the report of the proceedings, which is not yet published. You are reported as saying, on three occasions:
I may perhaps take points of order afterwards.
I might perhaps take a point of order after that.
'If I think it appropriate, I will take the point of order after I have heard the right hon. Gentleman.
I ask you to rule, Sir, that an hon. Member has a right to raise a point of order. It was quite obvious last night that several hon. Members wished to raise points of order. I wished to refer not to the statement that had been made but to what had happened previously, and that was the first opportunity I had to do so. It is important that the Chair should not be seen in any way to restrict the right of hon. Members which is so clearly stated in Erskine May.

Mr. Speaker: The Chair has no such desire. The hon. Member for Honiton (Mr. Emery) was called last night on a point of order, so he does not have much about which to complain.
The Chair is in great difficulty with points of order. Until it has heard the points of order it cannot always say whether it is a good one. For example, the hon. Member for Blaby (Mr. Lawson) yesterday was indignant and said he wished to raise a new point of order. It turned out not to be


a point of order but to refer to something which the Lord President had said on the length of time to be given to the Report stages of Finance Bills. That is not a matter of order and not a matter for the Chair. If on occasion the Chair thinks thmat a point of order cannot be a valid one it must allow the House to get on with its business. It can be seen from the number of points of order that are raised that I have no desire to restrict hon. Members' rights.

Mr. Gorst: I thank you, Mr. Speaker, for the explanation and the statement that you have made, which are entirely satisfactory as no precedent has been set. May I just explain the point of order which I intended to raise? I was intending to make a point of order not on the matter which was currently under discussion but on the Division which had just taken place. In view of your satisfactory explanation, Mr. Speaker, may I take this opportunity to give public notice that I shall withdraw my motion of censure.

Mr. Speaker: I am obliged.

Mr. Kershaw: On a point of order, Mr. Speaker. In your remarks just now, you pointed out that you did not see how a point of order could arise and, of course, the Chair must have discretion in such matters. Like my hon. Friends the Members for Hendon, North (Mr. Gorst) and Honiton (Mr. Emery), I wished to raise a point of order, not on your ruling about the statement of the Leader of the House but about what had immediately gone before. Unless you were willing to listen to the first few words, you could have had no idea of what I was intending to say.

Mr. Speaker: I suspected that it might be that, because the hon. Member for Honiton (Mr. Emery) had already raised that point of order. That business had been concluded. The hon. Member was too late to raise a point of order about the Division. I had announced the result of the Division. However, we will not go into that now.

QUESTION OF PRIVILEGE

Mr. Speaker: I will now rule on the complaint of breach of privilege raised by the hon. Member for Crewe (Mrs. Dunwoody).
I have considered the matter of the complaint made yesterday by the hon. Member of certain passages in the Travel Trade Gazette newspaper. I am satisfied that this is a proper case for me to allow a motion with precedence over the Orders of the Day.

The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): In view of your ruling, Mr. Speaker, I beg to move,
That the matter of the complaint be referred to the Committee of Privileges.
It would, I think, be in the interests of the House as a whole now if it were to decide that no further debate should take place at this stage.

Question put and agreed to.

Ordered,
That the matter of the complaint be referred to the Committee of Privileges.

NORTON VILLIERS TRIUMPH LTD. ORDER (BUSINESS STATEMENT)

Mr. Heseltine: On a point of order, Mr. Speaker. Last night we had a Business Statement from the Leader of the House announcing a guillotine on the Finance Bill and informing the House that the Norton Villiers Triumph Order was to be taken late on Wednesday night. My right hon. Friend the Member for Yeovil (Mr. Peyton) asked why, since the order had been on the Notice Paper for four months, it was necessary to give such extraordinarily short notice of the decision to bring it forward to a debate. The Leader of the House replied to my right hon. Friend by saying that it was
because the Chairman of Norton Villiers Triumph has informed us today that this money must be forthcoming this week, otherwise there will be redundancies. This is the first that the Government have heard of the urgency of the matter.
I have this morning spoken to the Chairman of NVT, who tells me that he has had no conversations with Ministers since last Thursday—[Hon. Members: "Oh."]—that no meeting took place with civil servants except for one last Friday with Treasury civil servants. The Chairman tells me that the position about redundancies in the company has been known, on an increasingly serious basis,


to Ministers in the Department of Industry for the past two to three months. I understand, although I am not able to get this information in writing because the Chairman is not in London, that that is the gist of the information that has been made available to the national Press.
There are two points on which I seek your guidance, Mr. Speaker. The first is whether you feel it would be appropriate, since we can no longer question the Business Statement made last night, for the Leader of the House now to add to the statement he made then. Second, if on reflection it turns out that the information given by the Leader of the House to justify bringing forward the NVT order at such short notice was based on false information given to the right hon. Gentleman then, what possible ground is there for proceeding with the order at such peremptory speed?

The Secretary of State for Industry (Mr. Anthony Wedgwood Benn): Further to that point of order, Mr. Speaker. Perhaps it would be for the convenience of the House if I were to reply. [Hon. Members: "No. The Leader of the House."] As the hon. Member for Henley (Mr. Heseltine) quite properly said, the order in question has been upon the Notice Paper for some time. It followed from discussions with the company that there was a degree of urgency in the matter—

Mr. Rost: When?

Mr. Benn: —which led me to communicate with my right hon. Friend the Leader of the House about this and to ask that the debate take place this week. There will be an opportunity during the debate, if it follows in accordance with the Business Statement made by my right hon. Friend last night, to explain the circumstances in which it was necessary to bring it forward. I believe that that will be for the convenience of the House.

Mr. Adley: Further to that point of order, Mr. Speaker. As I understand it, the Secretary of State for Industry was in Bristol yesterday. The Leader of the House came to the House at midnight last night with this extraordinary statement about the urgency of this matter. Could we please know from the Secretary of

State when he informed his right hon. Friend of the sudden urgency of this business?

Mr. Benn: I spoke to my right hon. Friend on the telephone from Bristol yesterday, before he made the Business Statement. My right hon. Friend—

Mr. Rost: When?

Mr. Benn: I spoke to my right hon. Friend from Bristol late yesterday morning. He was very anxious not to interfere with the pattern of business this week—[Hon. Members: "Oh."]—unless it was necessary so to do. I underlined in my conversation with the Leader of the House the importance of getting the order this week for the reason I gave.

Mr. Thorpe: With respect, this is an important point. [An hon. Member: "It is not a point of order."] I am not certain. I think that the Secretary of State in replying to the point of order was using the same discretion as you mentioned has existed on previous occasions, Mr. Speaker. Therefore it is in order, that discretion having been exercised, to ask a question. Is the Seccretary of State aware that no one doubts for a moment that he spoke to his right hon. Friend along the lines he has indicated? Is he aware that what the House will be interested to know is at what stage in the past four months did the sudden urgency arise which was transmitted to the Leader of the House yesterday?

Mr. Benn: I would have hoped that the House would have taken the normal procedure of listening to the argument on the order and not seek to anticipate the debate by means of points of order.

Several Hon. Members: rose—

Mr. Speaker: Order. Mr. William Hamilton.

Mr. William Hamilton: I beg—

Mr. Heseltine: Further to that point of order, Mr. Speaker. The House will be at a loss to understand how a question to the Leader of the House can be answered by the Secretary of State for Industry.

Mr. Speaker: Order. That is not a matter for the Chair. Mr. Hamilton.

Mr. William Hamilton: I beg—

Mr. Heseltine: Further to that point of order—

Mr. Gow: On a point of order, Mr. Speaker—

Mr. William Hamilton: I beg to—

Mr. Heseltine: Further to that point point of order, Mr. Speaker. In my original request to you, I sought guidance upon two points. The first point depended on whether—

Mr. Speaker: Order. The content of an answer is not a matter for the Chair. It cannot be a matter of order. We will go on. Mr. Hamilton.

Mr. William Hamilton: I beg to move—

Mr. Heseltine: Further to that point of order, Mr. Speaker—

Mr. Speaker: Order. We cannot pursue this matter further. [HON. MEMBERS: "Yes."]

Mr. William Hamilton: rose—

Mr. Whitelaw: On a point of order, Mr. Speaker. It really is not fair to my hon. Friend the Member for Henley (Mr. Heseltine) and to the House. My hon. Friend asked two questions seeking guidance from you. We have not had an answer from the Leader of the House. We have not been told why the Leader of the House had to announce this business last night as a matter of urgency. That is what we are entitled to know, and it is what we are entitled to know from the Leader of the House.

Mr. Speaker: Order. This is all coming out of the time to be devoted to the Finance Bill. The matters which have been raised are not matters for the Chair. I so rule.

Mr. William Hamilton: rose—

Mr. Gow: I gave notice at the earliest possible moment that I wished to make an application under Standing Order No. 9. May I now please do so, Mr. Speaker?

Mr. Speaker: Now is the appropriate time.

Mr. Gow: I beg to ask leave to move the Adjournment of the House, under

Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration: namely,
The untrue statement by the Leader of the House in the early hours of this morning when he said, 'It is because the Chairman of Norton Villiers Triumph has informed us today'—I underline the word 'today'—'that this money must be forthcoming this week otherwise there will be redundancies.'
My hon. Friend the Member for Henley (Mr. Heseltine) has just told the House that, despite the assurance given to the House by the Lord President shortly after midnight this morning, no such information had been given to the Government.
I submit that this is a specific matter. I also submit that it is an important matter. What could be more important than the assurance of the Leader of the House, one of the most senior members of the Government and himself the guardian and custodian of the rights of back benchers?
I turn now to the third aspect, that of urgency. What could be more urgent than the honour, truthfulness and integrity of the Government—

Mr. Speaker: The hon. Gentleman must not make the sort of speech he would make if I were to grant his application. He has to satisfy me that there should be a debate on this matter either today or tomorrow.

Mr. Gow: I hope that I have demonstrated that this matter is specific and important and that on the matter of urgency the whole credibility of the Government Front Bench is at stake.

Mr. Speaker: The hon. Member for Eastbourne (Mr. Gow) has made an application under Standing Order No. 9 asking me to allow a debate either today or tomorrow on the matter which he raised.
I am not prepared to grant that request.

Mr. Whitelaw: Further to the point of order raised by my hon. Friend the Member for Henley (Mr. Heseltine), I believe that the House is entitled to an answer to one simple question: when the Leader of the House made that statement last night, was it or was it not true? If it was not true, the order should be withdrawn and taken later. If it was true, the right hon. Gentleman the Leader of


the House should get up and say so. Was it true or was it not?

Hon. Members: Answer.

Mr. Speaker: Order. If the noise continues, I shall suspend the sitting.

Hon. Members: Answer, answer.

Mr. Speaker: The sitting is suspended until 4.15 p.m.
Grave disorder having arisen, Mr. SPEAKER, pursuant to Standing Order No. 26 (Power of Mr. Speaker to adjourn the House or suspend the sitting), suspended the Sitting of the House.
Sitting suspended at five minutes to Four o'clock and resumed at a quarter, past Four o'clock.

The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): During the adjournment I have made further inquiries into this matter.
I made a short Business Statement last night. In reply to the right hon. Member for Yeovil (Mr. Peyton), I gave an explanation in perfectly good faith believing that all that I said was absolutely accurate.
I have now found that my right hon. Friend the Secretary of State for Industry met Mr. Poore, the Chairman of Norton Villiers Triumph Ltd., on Thursday of last week. My right hon. Friend telephoned me yesterday from Bristol, and

said that this matter must be dealt with this week, otherwise there would be great difficulties in the firm. I pointed out to him the great inconvenience to the House in debating the matter this week. However, he insisted that the matter must be dealt with this week, otherwise there was a danger of redundancies. Therefore, I announced the matter last night.
There was no intention of misleading the House—none whatever—and my statement was made in perfectly good faith.

Mrs. Thatcher: We are grateful to the Leader of the House for making that statement. Do we understand that the order is still to stay on the Order Paper?

Mr. Edward Short: I know that this is extremely inconvenient, but I am told that there would be great difficulties in the firm if the guarantees to the bank were not not made available by Thursday morning.
I apologise to the House for this.

Mr. Ridley: On a point of order, Mr. Speaker. I do not understand how it was possible for the Government to guarantee £50 million to British Leyland, whereas they appear to be totally incapable of making this guarantee without—

Mr. Speaker: That illustrates the difficulty of the Chair over points of order. That is a very relevant point for the debate, but it is not a point of order for me today.

CROWN DEPARTMENT

4.17 p.m.

Mr. William Hamilton: I beg to move,
That leave be given to bring in a Bill to establish a Crown Department of State.
I do this as a man of peace.
This is not an original idea. There was a debate on this proposition on 14th December 1971, and it had extremely respectable—one might almost say "conservative"—protagonists. Its supporters were not what I would call radicals and certainly not anti-monarchists. They included the present Lord Houghton, then the right hon. Member for Sowerby and a devout defender of the institution of the Monarchy.
Perhaps I might quote what he said on that occasion. The scheme which he was putting forward and which I am now putting forward
… is not primarily devoted to money. It is more to do with the method of providing money.
He went on to expound the purpose of his proposal which had been before a Select Committee on which both he and I sat, and it was a proposition which had been defeated by only one vote in that all-party Committee.
The purpose was to pay
… the cost of the upkeep of the Monarchy … out of moneys provided by Parliament instead of it being a permanent charge by Act of Parliament on the Consolidated Fund.
My right hon. Friend went on to point out that the scheme would make
… the main expenses of the Monarch open to scrutiny and … to debate in this House."—[Official Report, 14th December 1975; Vol. 828, c. 293.]
He asserted, as has been asserted again by the recent report of the Trustees, that in any event there is a good deal of expenditure on this institution already dealt with on departmental Votes. My right hon. Friend quoted the Royal Yacht, the Queen's Flight, the Royal Palaces, and so on. In fact, about £3 million expenditure on the Monarchy is already borne by departmental Votes.
The object of my exercise this afternoon is to carry that further by bringing all the expenses of the upkeep of this institution, now scattered around in various

forms, under one head. The body responsible, as my right hon Friend suggested four years ago, would be the Commissioners of the Crown with, although I think that my right hon. Friend retreated from this proposal, a Department and a Minister responsible for answering Questions and debates in this House. That Department would clearly by the Treasury. However, there would be Commissioners of the Crown in the same way as we have Commissioners of the House of Commons to look into the expenditure of this House which is produced on a departmental Vote.
Under my proposals the expenses of the staff and officials of the Crown would be taken off the Civil List and put on the Vote of the Commissioners of the Crown. That would mean that the inflationary problems which we all face today could be dealt with on an annual basis within the terms of the social contract.
Indeed, my right hon. Friend the Prime Minister went very far along this line when he made his statement on 12th February, because he said:
The Government therefore propose, with the Queen's agreement, to seek the authority of Parliament to finance future increases in the provision for the Civil List and in the other payments authoriesd by Civil List Acts from 1976 onwards by means of a grant-in-aid made to the Royal Trustees by the Treasury out of moneys provided by Parliament. Grants-in-aid made in accordance with this arrangement would be included in Estimates and voted by Parliament in accordance with the normal procedure of Supply."—[Official Report, 12th February 1975; Vol. 886, c. 375.]
My Bill would not carry that much further than that which the Prime Minister recommended a few weeks ago, but it would bring us nearer to what every hon. Member wants—open and honest democratic government.
It seems to many hon. Members that the Monarch cannot have it both ways as is the case now. It cannot be argued that there is a private Household and all that taxpayers have to do is foot the bill. It is either private or public. It cannot be private and yet be financed by the taxpayer.
The principles enunciated by my right hon. Friend the then Member for Sowerby, now Lord Houghton, were supported by the Leader of the Liberal Party. One of his arguments was that


the creation of a Crown Department of State would
relieve the Monarch and the Royal Family of the enormous amount of very unfair publicity which they have to suffer at the moment."—[Official Report, 14th December 1971; Vol. 828, c. 327.]
My right hon. Friend the Member for Heywood and Royton (Mr. Barnett), now a brilliant jewel on the Treasury Bench, referred in scathing terms to the tax-free income of well over £100,000 for Prince Charles. We are waiting impatiently for him to remedy those abuses in the tax system. But that has nothing to do with my Bill. That is for the Treasury.
I refer now to the closing speech in the debate in December 1971 made by my right hon. Friend the Home Secretary. That was a forthright speech in which he accepted the proposition put forward by my right hon. Friend the then Member for Sowerby, now Lord Houghton. In the vote that ensued the present Prime Minister, with the Foreign Secretary, the Chancellor of the Exchequer, the Home Secretary, the Secretary of State for Education and Science, the Secretary of State for Employment, the Secretary of State for Social Services, the Chancellor of the Duchy of Lancaster and the Chief Whip voted for the proposition. In fact, that Lobby on that day reeked of respectability and deference. Therefore, there can be no question but that this Bill has very respectable antecedents.
I feel that the fears expressed in that debate—namely, that if annual Votes were presented to this House on the cost of the Monarchy they might lead to unseemly and perhaps embarrassing party wrangling—are unjustified. Having witnessed the scenes of the last few minutes, I do not think that we need to be afraid or ashamed of scenes of that kind. I understand the hysteria of right hon. and hon. Gentlemen opposite. They know that there is an unpleasant tax on its way for them, but we shall be debating that in due course. What I am proposing will happen anyway under the limited proposals announced by the Prime Minister on 12th February. The prospect is now offered of getting the institution of the Monarchy and its costs on to a more comprehensible and democratic footing.
It is in that spirit that I hope that the House will give me leave to introduce the Bill.

4.25 p.m.

Mr. Patrick Cormack: I shall not detain the House long. I do not think that the hon. Member for Fife, Central (Mr. Hamilton) should be allowed to get away with this Bill. Although the hon. Gentleman sought leave in terms rather more moderate than he adopts when talking in somewhat bilious rhetoric about the Royal Family, I think that it could be said that he seeks leave to introduce the Bill because, as a passionate believer in republicanism, he sees this as a step on the road towards republicanism.
I do not believe that the House should countenance this kind of suggestion and should not allow the Bill to be introduced, let alone have a Second Reading. To have a Minister of the Crown answerable for the affairs of the Monarchy at the Dispatch Box could serve only to weaken the democracy in which we all believe and for which we all struggle.
Anyone who witnessed the events of the last hour and of last night—the hon. Gentleman quite fairly referred to that matter—cannot for a moment think that to have the Crown represented by a partisan Minister at the Dispatch Box could serve the purposes of democracy and of the British constitution. I suggest that if hon. Members opposite allow the hon. Gentleman to introduce his Bill and consider giving it a Second Reading at a later date, they will be dealing a very real blow against the constitution which we all seek to uphold and at the Monarchy in which most people in this country—

Mr. J. Enoch Powell: Not all.

Mr. Cormack: Not all, I am reminded. I think that 91 hon. Members indicated last week that they did not support it. However, I suggest that most people in this country would view with considerable—[Interruption.] Hon. Gentlemen may make impolite interjections from a sedentary position, but most people in this country wish to uphold the Monarchy. Most people believe that it is the most priceless asset that this country has and that it is the most important guardian of the liberties of the individual.

Mr. Leslie Spriggs: On a point of order, Mr. Deputy Speaker. The


hon. Gentleman is raising an issue that was not dealt with by my hon. Friend in seeking leave to introduce his Bill. I appeal to you to bring some order to the House.

Mr. Deputy Speaker (Mr. George Thomas): I regret that it is a common experience for hon. Members to refer to issues that have not been raised. I suggest that the House hears the hon. Gentleman and reaches a decision rather quickly.

Mr. Cormack: Thank you, Mr. Deputy Speaker, for your protection. I was seeking to argue that anybody who heard the sepech by the hon. Member for Fife, Central could not deny that he was suggesting that there should be a Department of the Crown with a Minister answerable to this House. I suggest that that would weaken the Monarchy and our constitution. Furthermore, I suggest that

the hon. Gentleman was merely moving that motion because it was inappropriate to move a motion for the abolition of royalty—or royalties—or anything like that.

I put it to the House that the greatest symbol of unity that this country has is the Monarchy and that anybody who accepts the suggestions of the hon. Member and brings into the political arena, with all the problems that that involves, the Monarchy of this country is doing a great disservice to our democracy. With those words I forthrightly oppose the Bill that the hon. Gentleman seeks to introduce.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):—

The House divided: Ayes 174, Noes 207.

Division No. 119.]
AYES
[4.30 p.m.


Allaun, Frank
Evans, John (Newton)
McElhone, Frank


Anderson, Donald
Ewing, Harry (Stirling)
MacFarquhar, Roderick


Armstrong, Ernest
Faulds, Andrew
Mackenzie, Gregor


Ashley, Jack
Fernyhough, Rt Hon E.
McMillan, Tom (Glasgow C)


Ashton, Joe
Flannery, Martin
McNamara, Kevin


Atkins, Ronald (Preston N)
Fletcher, Ted (Darlington)
Madden, Max


Bagier, Gordon A. T.
Fraser John (Lambeth, N'w'd)
Marks, Kenneth


Barnett, Guy (Greenwich)
Freeson, Reginald
Marquand, David


Bates, Alf
Garrett, John (Norwich S)
Marshall, Jim (Leicester S)


Bennett, Andrew (Stockport N)
Garrett, W. E. (Wallsend)
Meacher, Michael


Booth, Albert
Ginsburg, David
Miller, Dr M. S. (E Kilbride)


Boothroyd, Miss Betty
Golding, John
Miller, Mrs Millie (Ilford N)


Bradley, Tom
Gould, Bryan
Molloy, William


Bray, Dr Jeremy
Grocott, Bruce
Newens, Stanley


Brown, Hugh D. (Provan)
Hamilton, W. W. (Central Fife)
Noble, Mike


Buchan, Norman
Hardy, Peter
Orbach, Maurice


Butler, Mrs Joyce (Wood Green)
Hatton, Frank
Ovenden, John


Callaghan, Jim (Middleton &amp; P)
Hayman, Mrs Helene
Palmer, Arthur


Campbell, Ian
Heffer, Eric S.
Pardoe, John


Canavan, Dennis
Hooley, Frank
Park, George


Carmichael, Neil
Hoyle, Doug (Nelson)
Parry, Robert


Carter, Ray
Huckfield, Les
Pavitt, Laurie


Clemitson, Ivor
Hughes, Robert (Aberdeen N)
Penhaligon, David


Cocks, Michael (Bristol S)
Hughes, Roy (Newport)
Perry, Ernest


Cohen, Stanley
Hunter, Adam
Prescott, John


Colquhoun, Mrs Maureen
Jackson, Colin (Brighouse)
Price, C. (Lewisham W)


Cook, Robin F. (Edin C)
Janner, Greville
Price, William (Rugby)


Corbett, Robin
Jeger, Mrs Lena
Radice, Giles


Cox, Thomas (Tooting)
Johnston, Russell (Inverness)
Richardson, Miss Jo


Craigen, J. M. (Maryhill)
Jones, Alec (Rhondda)
Roberts, Gwilym (Cannock)


Cunningham, Dr J. (Witeh)
Jones, Barry (East Flint)
Roderick, Caerwyn


Davies, Bryan (Enfield N)
Jones, Dan (Burnley)
Rodgers, George (Chorley)


Davies, Denzil (Llanelli)
Judd, Frank
Rodgers, William (Stockton)


Deakins, Eric
Kaufman, Gerald
Rooker, J. W.


Dean, Joseph (Leeds West)
Kelley Richard
Roper, John


de Freitas, Rt Hon Sir Geoffrey
Kerr, Russell
Rose, Paul B.


Dempsey, James
Kilroy-Silk, Robert
Rowlands, Ted


Doig, Peter
Kinnock, Neil
Sedgemore, Brian


Dormand, J. D.
Lambie, David
Selby, Harry


Douglas-Mann, Bruce
Lamborn, Harry
Shaw, Arnold (Ilford South)


Eadie, Alex
Lamond, James
Sheldon, Robert (Ashton-u-Lyne)


Edelman, Maurice
Latham, Arthur (Paddington)
Short, Mrs Renée (Wolv NE)


Edge, Geoff
Lewis, Ron (Carlisle)
Silverman, Julius


Ellis, John (Brigg &amp; Scun)
Lipton, Marcus
Skinner, Dennis


Ellis, Tom (Wrexham)
Litterick, Tom
Snape, Peter


English, Michael
Lomas, Kenneth
Spearing, Nigel


Ennals, David
Loyden, Eddie
Spriggs, Leslie


Evans, Gwynfor (Carmarthen)
Mabon, Dr J. Dickson
Stallard, A. W.


Evans, Ioan (Aberdare)
McCartney, Hugh
Steel, David (Roxburgh)




Stewart, Rt Hon M. (Fulham)
Torney, Tom
Whitlock, William


Stoddart, David
Wainwright, Edwin (Dearne V)
Willey, Rt Hon Frederick


Stott, Roger
Walker, Terry (Kingswood)
Wilson, Alexander (Hamilton)


Taylor, Mrs Ann (Bolton W)
Ward, Michael
Wilson, William (Coventry SE)


Thomas, Dafydd (Merioneth)
Watkins, David
Wise, Mrs Audrey


Thomas, Mike (Newcastle E)
Watkinson, John
Wrigglesworth, Ian


Thomas, Ron (Bristol NW)
Wellbeloved, James
Young, David (Bolton E)


Thorne, Stan (Preston South)
White, Frank R. (Bury)
TELLERS FOR THE AYES:


Tierney, Sydney
White, James (Pollok)
Mr. Bob Cryer and


Tomlinson, John
Whitehead, Phillip
Mr. James Johnson.




NOES


Adley, Robert
Grant, Anthony (Harrow C)
Morris, Michael (Northampton S)


Alison, Michael
Gray, Hamish
Morrison, Charles (Devizes)


Amery, Rt Hon Julian
Grieve, Percy
Morrison, Hon Peter (Chester)


Atkins, Rt Hon H. (Spelthorne)
Griffiths, Eldon
Mudd, David


Awdry, Daniel
Grimond, Rt Hon J.
Neave, Airey


Baker, Kenneth
Grist, Ian
Nott, John


Banks, Robert
Grylls, Michael
Onslow, Cranley


Beith, A. J.
Hall, Sir John
Osborn, John


Bell, Ronald
Hall-Davis, A. G. F.
Page, Rt Hon R. Graham (Crosby)


Bennett, Dr Reginald (Fareham)
Hampson, Dr Keith
Paisley, Rev Ian


Benyon, W.
Hannam, John
Parkinson, Cecil


Berry, Hon Anthony
Harrison, Col Sir Harwood (Eye)
Pattie, Geoffrey


Biffen, John
Harvie Anderson, Rt Hon Miss
Percival, Ian


Biggs-Davison, John
Havers, Sir Michael
Peyton, Rt Hon John


Blaker, Peter
Hayhoe Barney
Powell, Rt Hon J. Enoch


Boscawen, Hon Robert
Henderson Douglas
Prior, Rt Hon James


Bowden, A. (Brighton, Kemptown)
Heseltine, Michael
Pym, Rt Hon Francis


Boyson, Dr Rhodes (Brent)
Higgins, Terence L.
Raison, Timothy


Braine, Sir Bernard
Holland, Philip
Rathbone, Tim


Brotherton, Michael
Hooson, Emlyn
Renton, Rt Hon Sir D.(Hunts)


Buchanan-Smith, Alick
Hordern, Peter
Renton, Tim (Mid-Sussex)


Bulmer, Esmond
Howe Rt Hon Sir Geoffrey
Rhys Williams, Sir Brandon


Burden, F. A.
Howell, David (Guildford)
Ridley, Hon Nicholas


Butler, Adam (Bosworth)
Howell, Ralph (North Norfolk)
Rifkind, Malcolm


Chalker, Mrs Lynda
Howells, Geraint (Cardigan)
Roberts, Michael (Cardiff NW)


Channon, Paul
Irvine, Bryant Godman (Rye)
Roberts, Wyn (Conway)


Churchill, W. S.
Irving, Charles (Cheltenham)
Ross, Stephen (Isle of Wight)


Clark, Alan (Plymouth, Sutton)
James, David
Ross, William (Londonderry)


Clark, William (Croydon S)
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Rossi, Hugh (Hornsey)


Clarke, Kenneth (Rushcliffe)
Jessel, Toby
Sainsbury, Tim


Clegg, Walter
Jones, Arthur (Daventry)
St. John-Stevas, Norman


Cockcroft, John
Jopling, Michael
Shaw, Michael (Scarborough)


Cooke, Robert (Bristol W)
Kellett-Bowman, Mrs Elaine
Shelton, William (Streatham)


Cope, John
Kershaw, Anthony
Shepherd, Colin


Cormack, Patrick
Kilfedder, James
Silvester, Fred


Corrie, John
King, Tom (Bridgwater)
Sims, Roger


Costain, A. P.
Knight, Mrs Jill
Sinclair, Sir George


Craig, Rt Hon W. (Belfast E)
Lane, David
Smith, Dudley (Warwick)


Crawford, Douglas
Langford-Holt, Sir John
Spence, John


Crouch, David
Latham, Michael (Melton)
Spicer, Jim (W Dorset)


Davies, Rt Hon J. (Knutsford)
Lawrence, Ivan
Sproat, Iain


Dean, Paul (N Somerset)
Lawson, Nigel
Stainton, Keith


Dodsworth, Geoffrey
Le Marchant, Spencer
Stanley, John


Douglas-Hamilton, Lord James
Lester, Jim (Beeston)
Stewart, Donald (Western Isles)


du Cann, Rt Hon Edward
Luce, Richard
Stokes, John


Dunlop, John
MacCormick, Iain
Stradling Thomas, J.


Durant, Tony
McCrindle, Robert
Tapsell, Peter


Dykes, Hugh
McCusker, H.
Taylor, R. (Croydon NW)


Eden, Rt Hon Sir John
Macfarlane, Neil
Taylor, Teddy (Cathcart)


Edwards, Nicholas (Pembroke)
Macmillan, Rt Hon M. (Farnham)
Tebbit, Norman


Emery, Peter
McNair-Wilson, M. (Newbury)
Thatcher, Rt Hon Margaret


Ewing, Mrs Winifred (Moray)
Madel, David
Thompson, George


Eyre, Reginald
Marshall, Michael (Arundel)
Townsend, Cyril D.


Fairbairn, Nicholas
Marten, Neil
Tugendhat, Christopher


Fairgrieve, Russell
Mather, Carol
van Straubenzee, W. R.


Fell, Anthony
Maudling, Rt Hon Reginald
Vaughan, Dr Gerard


Finsberg Geoffrey
Mawby, Ray
Wainwright, Richard (Colne V)


Fisher, Sir Nigel
Maxwell-Hyslop, Robin
Walters, Dennis


Fletcher-Cooke, Charles
Mayhew, Patrick
Warren, Kenneth


Fowler Norman (Sutton C'f'd)
Meyer, Sir Anthony
Watt, Hamish


Fraser, Rt Hon H. (Stafford &amp; St)
Miller, Hal (Bromsgrove)
Weatherill, Bernard


Freud, Clement
Mills, Peter
Welsh, Andrew


Fry, Peter
Mitchell, David (Basingstoke)
Whitelaw, Rt Hon William


Gardiner George (Reigate)
Moate, Roger
Winterton, Nicholas


Gilmour, Rt Hon Ian (Chesham)
Molyneaux, James
Young, Sir G. (Ealing, Acton)


Gilmour, Sir John (East Fife)
Monro, Hector
Younger, Hon George


Goodhew, Victor
Montgomery, Fergus



Gorst, John
Moore, John (Croydon C)
TELLERS FOR THE NOES:


Gow, Ian (Eastbourne)
More, Jasper (Ludlow)
Mr. Peter Rost and


Gower Sir Raymond (Barry)
Morgan-Giles, Rear-Admiral
Mr. Michael Mates.

Question accordingly negatived.

FINANCE BILL (ALLOCATION OF TIME)

4.41 p.m.

The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): I beg to move, That the

Proceedings
Time for conclusion or interruption


New Clauses not relating to capital transfer tax or estate duty, and Amendments relating to Clauses 1 to 18 and 50 to 56 and to Schedules 1 to 3 and 12.
To be brought to a conclusion at midnight on the first allotted day.


New Clauses relating to capital transfer tax or estate duty.
To be brought to a conclusion at midnight on the second allotted day.


Amendments relating to Clauses 19 to 49, new Schedules.
(a) To be interrupted at midnight on the third allotted day;


Amendments relating to Schedules 4 to 11, and Third Reading.
(b) to be brought to a conclusion at midnight on the fourth allotted day.

(2) Standing Order No. 43 (Business Committee) shall not apply to this Order.

(3) The Third Reading of the Bill may be taken immediately after the Consideration of the Bill, notwithstanding the practice of the House as to the interval between the stages of a Finance Bill.

Dilatory motions

2. No dilatory Motion with respect to, or in the course of, Proceedings on the Bill shall be made on an allotted day except by a Member of the Government, and the Question on any such Motion shall be put forthwith.

Standing Order No. 13

3. Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business) shall not apply on an allotted day.

Private Business

4. Any private business which has been set down for consideration at Seven o'clock on an allotted day shall, instead of being considered as provided by the Standing Orders, be considered at the conclusion of the Proceedings on the Bill on that day, and paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the Proceedings on the Bill or, if those Proceedings are concluded before Ten o'clock, for a period equal to the time elapsing between Seven o'clock and the completion of those Proceedings.

Conclusion of Proceedings

5.—(1) For the purpose of bringing to a conclusion any Proceedings which are to be

following provisions shall apply to the remaining Proceedings on the Bill:

Report and Third Reading

1.—(1) The remaining Proceedings on Consideration and the Proceedings on Third Reading of the Bill shall be completed in four allotted days and (subject to paragraph 5(2) of this Order) shall be brought to a conclusion or interrupted, as the case may be, at the times shown in the following Table:

brought to a conclusion at a time appointed by this Order and which have not previously been brought to a conclusion, Mr. Speaker shall forthwith proceed to put the following Questions (but no others) that is to say—

(a) the Question or Questions already proposed from the Chair, or necessary to bring to a decision a Question so proposed (including, in the case of a new Clause or new Schedule which has been read a second time, the Question that the Clause or Schedule be added to the Bill);
(b) the Question on any amendment or Motion standing on the Order Paper in the name of any Member, if that amendment or Motion is moved by a Member of the Government;
(c) any other Question necessary for the disposal of the business to be concluded;

and on a Motion so moved for a new Clause or a new Schedule, Mr. Speaker shall put only the Question that the Clause or Schedule be added to the Bill.

(2) Proceedings under sub-paragraph (1) of this paragraph shall not be interrupted under paragraph 1(1) of this Order.

(3) If an allotted day is one to which a Motion for the adjournment of the House under Standing Order No. 9 stands over from an earlier day, the bringing to a conclusion or interruption of any Proceedings which under this Order are to be brought to a conclusion at a stated time on that day shall be deferred for a period equal to the duration of the Proceedings on the Motion under Standing Order No. 9.

(4) If a Motion for the adjournment of the House under Standing Order No. 9 stands over


to Seven o'clock on an allotted day, the bringing to a conclusion or interruption, as the case may be, of any Proceedings on the Bill which, under this Order, are to be brought to a conclusion or interrupted on that day at any hour falling after the beginning of the Proceedings on that Motion shall be postponed for a period equal to the duration of the Proceedings on that Motion.

Supplemental orders

6.—(1) The Proceedings on any Motion moved in the House by a Member of the Government for varying or supplementing the provisions of this Order shall, if not previously concluded, be brought to a conclusion one hour after they have been commenced, and the last foregoing paragraph shall apply as if the Proceedings were Proceedings on the Bill on an allotted day.

(2) If on an allotted day on which any Proceedings on the Bill are to be brought to a conclusion at a time appointed by this Order the House is adjourned, or the sitting is suspended, before that time no notice shall be required of a Motion at the next sitting by a Member of the Government for varying or supplementing the provisions of this Order.

Saving

7. Nothing in this Order shall—

(a) prevent any Proceedings to which the Order applies from being taken or completed earlier than is required by the Order, or
(b) prevent any business (whether on the Bill or not) from being proceeded with on any day after the completion of all such Proceedings on the Bill as are to be taken on that day.

Interpretation

8. In this Order—
'allotted day' means any day (other than a Friday) on which the Bill is put down as first Government Order of the Day provided that a Motion for allotting time to the Proceedings on the Bill to be taken on that day either has been agreed on a previous day, or is set down for consideration on that day;
'the Bill' means the Finance Bill.

It is with great regret that I move this motion. There are, of course, many precedents for timetable motions under Governments of both parties. One of my predecessors, the late Mr. Iain Macleod, introduced four guillotine motions in one Session. This is the first that I have moved in a year. As for the record of the two parties, since the Second World War, Conservative Governments have introduced 21 timetable motions and Labour Governments have introduced eight.

Mr. Macleod said that no Leader of the House had to argue that there might be occasions on which a guillotine was

justified. He went on to say that what he always had to argue was that the particular motion before the House was justified. That I now seek to do.

Sir John Hall: The right hon. Gentleman has given the House information about the number of times on which guillotine motions have been moved. How many times have they been moved to closure a Finance Bill?

Mr. Short: I am sure that the hon. Gentleman will make his own speech and my right hon. Friend the Chief Secretary will answer all these points. I think that the last occasion was in 1968.
I hope that the Opposition will spare us any ritual objections to timetable motions as such, when we recall the guillotines which they imposed on the Industrial Relations Act, the Housing Finance Act, the Housing (Financial Provisions) (Scotland) Act, the European Communities Act and the Counter-Inflation (Temporary Provisions) Act.
I should have preferred that we completed our proceedings on the Finance Bill with no need for a timetable motion. I wish that the two sides of the House could have agreed on sensible arrangements for allocating what is by any standard a generous amount of time for the remaining stages of the Bill. That would have allowed us to complete our consideration of it in a sensible manner. Unfortunately, such an agreement proved to be unobtainable. My right hon. Friend the Chief Secretary sought such an understanding last week in discussion with the right hon. and learned Member for Surrey, East (Sir G. Howe) but could not obtain it.
The reason why he could not do so became only too clear yesterday morning, when the right hon. and learned Gentleman was heard saying on the BBC "Today" programme:
Oh, it isn't a question of extra time to debate in the House. We shall be using our time in the House to use every legitimate parliamentary means to secure the withdrawal of this tax and that's the object of our debate this week…. And we are entitled to use every legitimate parliamentary means to stop this tax and we intend to try and do just that.
This intention by the Opposition to use every device, every stratagem, to block the Bill's progress was only too clearly confirmed yesterday when there were large


numbers of Opposition points of order—or I should say, as Mr. Speaker said, the same point of order made over and over again—and when the House was required to spend over three hours discussing a procedural motion, the terms of which had already been agreed with the right hon. and learned Gentleman and which were intended to honour the promise that I made to the House last Thursday. Yet the Opposition felt it necessary to debate the motion for three hours.
I make no complaint whatever about all this. The Opposition are entitled to proceed in any way they wish, so long as they remain within the rules of order—which is entirely a matter for the Chair. Whether the public outside are impressed with all this is another matter altogether. Our system of parliamentary democracy requires that Oppositions shall be allowed to do everything in their power to prevent a Bill with which they profoundly disagree from reaching the Statute Book. On the other hand, our system requires that a Government with a majority in this House should be entitled to ask the House at the end of the day to pass the legislation for which they have a mandate from the electorate—

Mr. Percy Grieve: Nonsense.

Mr. Short: We had a million more votes than the hon. and learned Member's party.
Every reasonable opportunity must be provided for discussion of the Bill and amendments to it. But when that has been done, the Government are entitled to ask for its enactment. That is what has happened in this case.
However much the Opposition may dislike the capital transfer tax, there can be no doubt that we have a mandate to introduce it—[HON. MEMBERS: "No."] It was included in our election manifesto last February, it was repeated in October, we published a White Paper about it in August and we fought the last election on it.
As soon as my right hon. Friend the Chancellor of the Exchequer opened his Budget on 12th November, it was known to all hon. Members that the Finance Bill must receive the Royal Assent within four months of the passing of the Budget Resolutions—that is, by 14th March—
in accordance with the Provisional Collection of Taxes Act 1968. In that broad sense, the timetable for all Finance Bills is laid down from the start.
The Government have certainly wasted no time. The Bill had its Second Reading on 17th December, and its Committee stage on the Floor started on 15th January and finished on 22nd January. It entered Standing Committee the following day and the Committee reported on 19th February. Allowing 15 hours for dinner breaks, the Bill was in Committee, in the House and upstairs, for about 160 hours. By any recent standards that is a generous allowance of time, even for a highly controversial Bill. It would be appropriate indeed to pay tribute to the energy, stamina and determination of the Standing Committee—both sides. I do not know how they stood it.
I think that the House will also acknowledge the patient, resilient and reasonable manner in which the Chancellor, the Chief Secretary and the Financial Secretary responded to the points put to them. When serious points were made, they did not just brush them aside but responded seriously and helpfully to them. Indeed, that willingness to meet the points made in Committee is one of the reasons for the sizeable number of Government amendments on Report.

Mr. Peter Hordern: Does the right hon. Gentleman recognise the distinction between applying a timetable motion on Finance Bills and doing so on other legislation? Does he recognise that, on the only other occasion since the war when there was a guillotine motion on a Finance Bill, time was allotted for 11 further sittings for discussion after the guillotine had been applied? Does he not now recognise that the very amendments of which he speaks, for which the Government are entirely responsible, require far more time than is allotted in the motion?

Mr. Short: My right hon. Friend will deal with that point when he replies. Whether the vast number of Opposition amendments now flooding the order paper are all points of substance is not for me to say. No doubt the Chief Secretary will comment on that, too. All that I would say is that it is clear from the sheer volume of those amendments and from the very slow progress made


yesterday that the Opposition are seeking to prolong proceedings on the Bill to the point at which it cannot be completed in the time laid down by statute. There is no doubt about that whatever.

Mr. Peter Emery: Will the right hon. Gentleman give way?

Mr. Short: This is a very short debate, and many hon. Members wish to speak.

Mr. Emery: I thank the right hon. Gentleman for giving way. There is a most relevant point with which he has not dealt in his speech. Will he tell the House how many new Government amendments—not Opposition amendments—have to be considered during the Report stage, with the same consideration as would be given in Committee? I believe that there is a large number. The House should know how many there are.

Mr. Short: Almost all the Government amendments are concessions.

Mr. Emery: How many?

Mr. Short: Almost all.

Hon. Members: How many?

Mr. Short: I do not know how many, but a very large number.
No one can argue that insufficient time has been allowed for the remaining stages. Since 1909 there has been only one Finance Bill for which more time has been allowed for Report and Third Reading. What we have now to decide is a sensible way of allocating the very reasonable amount of time available.
The motion before the House would provide for us to complete, as follows, first, all the non-capital transfer tax clauses and schedules by tonight; second, the new clauses on capital transfer tax or estate duty by tomorrow night; and all the remaining amendments, new schedules and the Third Reading by Monday night—that is, we would have both Thursday and Monday for these. I would draw the particular attention of the House to this last point, as the way in which this part of the order has been printed may give rise to some doubt about it.
Of course, if the Opposition would prefer some different arrangement for allocating the time or some supplementary arrangement for the proceedings on any

of the allotted days, I should be only to glad to consider this. Paragraph 6(1) of the motion provides for any necessary supplemental orders.
At the end of the proceedings tonight, tomorrow night or on Monday night, paragraph 5(1) of the motion provides that any amendments or new clauses not moved by a member of the Government and relating to those parts of the Bill to be completed on that day, should fall. The Question would then be put without further debate on amendments or new clauses moved by a member of the Govment. The reason for this provision is that, as I have just said, virtually all the Government amendments are in fact concessions. Clearly the House would wish such amendments to be taken.
On Thursday night the motion simply provides for the proceedings to be interrupted at midnight, and nothing more. They would then continue on Monday at the point at which they were left over. The remaining provisions are common form, but my right hon. Friend will gladly deal with any points made in the debate about them when he winds up the debate.

Mr. Nigel Lawson: The right hon. Gentleman has said very kindly that he is prepared to entertain suggestions from the Opposition side of the House as to changes in the timetable. Why is it that the debates have to stop at midnight and not at a later hour? The right hon. Gentleman could still have his days and get the Pill through Report by the day he wishes, but he could allow more time for the discussion of this very important tax.

Mr. Short: The finishing time each day is the part of the motion which is not negotiable, but the allocation of the time is. We believe that the debates will be all the better for finishing at a reasonable hour.
I would say once again that if the Opposition want to use the available time differently, this could easily be arranged. In particular, if they would prefer to dispense with a Third Reading so as to give more time for the Report stage, that is entirely open to them.
This motion is needed to enable the proceedings on the Finance Bill, for which we have a mandate front the electorate, to be completed in a fair and


reasonable way by the date prescribed by law.

4.55 p.m.

Mr. John Peyton: I have never believed that guillotine debates have been made any more interesting by the number of precedents that the introductory speeches have contained. I am bound to say that I have not bothered myself with them. I should like to assure the right hon. Gentleman the Leader of the House that I have no ritual objections to timetable motions as such. I think that we should do much better on some occasions to limit our debates to reasonable lengths. [Interruption.] It would be very helpful indeed if Oppositions could make their perfectly reasonable points without a long stream, a Niagara, of tiresome interruptions by people who are determined to ruin discussion and not to contribute to it. I refer specifically to the hon. Member for Bolsover (Mr. Skinner).
I have always been among the most charitable of men. I wish to see the best in everyone.

An Hon. Member: Do not look in the mirror.

Mr. Peyton: I almost wish that I could look in a mirror rather than face hon. Members on the Government side of the House.
As I was saying, I try to take the most favourable view, even of right hon. and hon. Members on the Government side. But I was a little surprised this afternoon when the right hon. Gentleman the Leader of the House suddenly said, quite baldly, "I make no complaint". We were not waiting for any complaints from him. We have some complaints to make. It is entirely from the Opposition side of the House that the complaints will come. We hope very much that the right hon. Gentleman will listen to them.
I should like to take the opportunity—rare in these days—of agreeing with the Leader of the House on one point, and that is saluting the stamina of the Standing Committee. One can only hope that Government Members got some satisfaction out of it. My right hon. and hon. Friends got none at all; of that I am sure. Nevertheless, they gallantly

did their duty in attempting to secure improvements to a very nasty measure.
I am concerned—because I think that this goes to the right hon. Gentleman's good faith—to know whether the Leader of the House is really satisfied that his undertakings to give five days on Report have been discharged by the arrangements now made. I must tell him that I am not. If the right hon. Gentleman will consider the statements that he has made on a number of occasions, together with the questions that I have asked in reply, I think that he will find—or at least, any independent judge would conclude this—that he was bound in honour to give five full days on Report.
The Government's handling of the measure has not been received with wild acclamation in the Press. Perhaps the best comment was:
A lesson in how not to legislate.
But there was one more to which I particularly call the attention of the Government. It appeared in the Financial Times of 1st March:
The more one looks at this Bill, the more one finds in it to criticise. It is by far the most incompetently drafted and ill-conceived legislation since 1965, and the sooner the Government drops the whole scheme for a year's proper consideration the better.
My suggestion to the House is that there should be two main aims of legislation, particularly where tax is concerned. It should be fair. I am not quite certain whether the Government really aim to be fair; but that would certainly be the aim of my right hon. and hon. Friends. The second main purpose is that it should be clear and certain. Not even the most enthusiastic supporters of this wretched measure could possibly claim that it was clear.
I wonder very much what in the long run will be the effect of a measure such as this on the already stretched relations which exist between the Inland Revenue and the public. I know that some Labour Members and some members of the Government have rather fanciful ideas about the Inland Revenue. The other day the right hon. Lady the Secretary of State for Social Services compared the Inland Revenue with Robin Hood. That seemed to be a slight flight of fantasy. I am not quite sure whether we are now to be told that she is Maid Marion.
To impose this kind of legislation upon the public when it is so ill-digested, ill-designed and ill-thought-out will dangerously worsen the relations between the Government machine and the public.

Mr. John Gorst: Will my right hon. Friend add a third point to the two that he has already made? Does he agree that there should not be any taxation without discussion?

Mr. Peyton: Indeed. I am obliged to my hon. Friend. Of course, my hon. Friend is right—[Interruption.] In discussing a motion like this in a Parliament where the aim of the Government is to terminate and shorten discussion it is interesting to observe how hard Labour Members find it to stomach the views of those who do not agree with them. If any hon. Members wish to interrupt me, they are perfectly free to do so. I shall gladly give way. I point out, however, that when Labour Members sprinkle sedentary interruptions over our affairs they do little credit to themselves and bring no glory to Parliament.

Mr. John Tomlinson: I suggest to the right hon. Gentleman that the people who did not like listening to arguments with which they disagreed were his own supporters in Standing Committee. They seemed to run away with remarkable regularity, to such effect that the Government were winning votes in Standing Committee, despite the Opposition's wholehearted opposition, by 16 votes to 5 in the small hours of the morning.

Mr. Peyton: Looking at the hon. Gentleman and hearing what he has to say, I am bound to say that I have the utmost sympathy with my hon. Friends who wished to get away.
The Chancellor is introducing two new taxes. He has properly referred the wealth tax to a Select Committee. It is a complicated matter which clearly needs a good deal of preparatory thought before it can be introduced into Parliament. By contrast, the Government have plunged into the capital transfer tax on the ground, presumably, that some immediate meal had to be thrown to the Left wing wolves. Perhaps it was considered that they could wait until later for

the rest of the meal—[Interruption.] Again and again the Patronage Secretary is making speeches from a sedentary position. I hope very much that one day he will cease to be Patronage Secretary. Perhaps we shall then be able to hear him making speeches from the Dispatch Box. I hope that they will be even more sensible than some of the interventions which he so constantly makes from his present position. I said to the right hon. Gentleman the other day that he has achieved the status of being the most garrulous Chief Whip of all time.

The Parliamentary Secretary to the Treasury (Mr. Robert Mellish): I am obliged to the right hon. Gentleman, but I never said a word.

Mr. Peyton: Then we can only tender our profound sympathy. It seems that the right hon. Gentleman does not even know when he is talking. What concerns and worries my right hon. and hon. Friends is that the Government have shown little concern for the impact of this legislation upon farms, woodlands, small businesses, charities and gifts. Initially it was apparently the Chancellor's intention to put gifts to families on the same basis as gifts to anybody else. It seems that that has gone by the board. I am bound to say that I recognise that fact with some gratitude. None the less, I do not believe that the Government have yet hoisted in just how bitter many people will feel throughout the country. They are not all rich, prosperous, bloated plutocrats but people who are desperately trying to run businesses in a difficult climate. In many cases this burden will make it almost impossible for them to do so. The way in which the Government continue to dismiss that danger and to treat it lightly is wrong and unfair. It is something for which they will be roundly and properly condemned in the near future.
I now turn to the painful question of how the Bill was handled in Standing Committee. The presence of the Chief Secretary and the Financial Secretary really requires one in kindness to draw a veil over those proceedings. Suffice it to say, they have earned no laurels for the way in which they handled the proceedings in Standing Committee. The Leader of the House, in opening the


debate, referred perfectly properly to the fact that there had been some 160 hours of debate in Committee on the Floor of the House and in Standing Committee.

Mr. William Molloy: rose—

Mr. Peyton: I shall give way to the hon. Gentleman shortly. The point that I wish to make is that no Treasury Minister ever complained, so far as I am aware in Standing Committee that the Opposition were filibustering or holding up the progress of the Bill. Indeed, the situation was very much the reverse. It is my understanding that avoidable delays were caused because Treasury Ministers were not always as familiar as one would have hoped them to be with all the features of the nasty little creature that they had sired.
I understand that 167 Government amendments have been tabled. The Leader of the House referred to the many Opposition amendments and wondered how many of them were genuine. The Opposition have tabled roughly 700 amendments for consideration. I hope that the Government will take them seriously even in the limited time that is available. I am concerned with the 167 amendments which have come from the Government. Many of them are long and complex, and there should have been very much more time for mature consideration to be given to them by people inside and outside the House.
There have been repeated requests made to the Leader of the House for more time to consider the Government amendments. All that the right hon. Gentleman has ever been willing to say is "I assure the House that there will be sufficient time for consideration to be given to them." Never has the right hon. Gentleman even adverted to the need to give those outside the House who will be affected by the Bill an opportunity to attempt to understand what is contained in the very complicated amendments which the Government have tabled.

Sir John Hall: Would not my right hon. Friend agree that to debate the very large number of Government amendments, some of which are highly complex, allowing a short time for each one would take about 40 hours?

Mr. Peyton: I quite agree. One of the questions which Mr. Patrick Hutber raised in the Sunday Telegraph last Sunday was: how on earth can these vital amendments be properly considered in the time? Mr. Hutber mentioned three amendments the results of which seem to be very obscure. I wonder whether the Chancellor or whichever Treasury Minister replies will be good enough to answer the points which are raised in Mr. Hutber's article.

Mr. Lawson: Is my right hon. Friend aware that the allotted time works out at less than 10 minutes per Government amendment, assuming no discussion of Opposition amendments whatsoever?

Mr. Peyton: My hon. Friend is quite right to point out that monstrous fact. The Government have plainly reached—I can understand this attitude of theirs—a position of total despair about this wretched Bill, and the sooner they can put the wraps over it the better, and the less probing it receives from Parliament and from my hon. Friend in particular, the better obviously they will be pleased.

Mr. Denis Skinner: The right hon. Gentleman referred to someone called Patrick Hutber who writes the City columns in the Sunday Telegraph. Is it a fact that this same man was the wizard behind John Bloom?

Mr. Peyton: The hon. Gentleman must pursue his nasty feuds elsewhere. He almost always manages to keep his interruptions well in character. He has succeeded on this occasion.
The questions the Government must answer are: first, are they satisfied that those outside the House have had a reasonable chance to consider the Government's amended proposals; and, secondly, did they ever really intend that those outside should have such a chance?

Mr. Molloy: I readily understand that it is the responsibility of any Opposition to oppose any guillotine motion, and, if they did not, they would not be doing their proper job. Will not the right hon. Gentleman concede that he cannot legitimately claim that my right hon. and hon. Friends who served on the Standing Committee should not be accorded any laurels simply because the Conservative


Opposition failed to turn up or ran away long before the debates were finished? If the Opposition really represented the people outside—

Mr. Deputy Speaker (Mr. George Thomas): Order. This is a three-hour debate and long interventions will take time that could be used for speeches.

Mr. Peyton: I apologise to you, Mr. Deputy Speaker, and to the House for my error of judgment in giving way to the hon. Gentleman.
The politics of envy have drawn the Government, first, into a dislike of success and, secondly, into showing a positive hostility to wealth which leaves one astonished that only the other day they were all muttering the chorus question—why no investment? If they would only look at themselves and at what they are now doing and saying and then ask that question again, they might find the answers very near home on their own desks.

Mr. Bob Cryer: Will the right hon. Gentleman give way?

Mr. Peyton: No. I have already learned a very sharp lesson from the hon. Gentleman's two neighbours.
Lastly, what is under charge here is the good faith of the Labour Party. We on this side of the House freely acknowledge that the Leader of the House has a very difficult task in reconciling the interests of the House of Commons with those of the Government, and particularly does this apply to this Government. His failure to do so is something which we would always regret. What we deplore is the fact that he never even tries and so has forfeited wholly the confidence of this side of the House.

5.15 p.m.

Mr. Maurice Macmillan: The other day we decided as an experiment that the proceedings of the House should be broadcast on radio. I do not know whether to be glad or sad that that experiment has not yet started.
I think I am sad, because I believe that the public would be reassured to see how very quick the House is to react to clear evidence that it is being misled by the Government and equally quick to

accept without reservation a statement made by a Minister that his misleading is due to a misunderstanding.
In another sense I am glad that our proceedings are not being broadcast, because I am sure that the public would have been so kind as the House has been today to the right hon. Member for Newcastle-upon-Tyne, Central (Mr. Short) and I am not sure that they would trust him as much as no doubt they now do if they had heard for themselves the arrogant contempt with which he, as Leader of the House, announced this guillotine motion earlier this morning, with no explanation, after the closure had been already decided and with no possibility of his being questioned at that time about his motives or reasons. The public would not have been satisfied with the right hon. Gentleman's wholly inadequate justification of the need for a timetable on this Finance Bill.
Finance Bills should never be guillotined. With the sole unfortunate exception of the 1931 Bill they never have been, except by Labour Governments—

Mr. Alf Bates: 1967.

Mr. Macmillan: —in 1968 and now in 1975, in both cases bringing in ill-thought out new schemes which are damaging major interests covering great aspects of our national life.
The Leader of the House and hon. Members below the Gangway in their seated interventions have tried to make out that the capital transfer tax is of little importance except to a few very rich men, most of whom, they imply, are crooks anyway, otherwise, how could they be rich?
That is the view of right hon. and hon. Members below the Gangway. I do not think that it is wholly the view of the Government who, as far as one can judge from the enthusiasm with which they pursue every contradictory aspect of their policies, still believe in a mixed economy in which private enterprise has a function.
The new tax and the 167 amendments which the debates in Standing Committee have produced on the Notice Paper in the names of Treasury Ministers affect outside interests which, as my right hon.


Friend the Member for Yeovil (Mr. Peyton) said, have had no time to consider their new position, because these amendments have been only recently published and are very complicated. They may be minority interests, but that is no reason why they should be shabbily treated by the Government. There are other minorities affected by the Bill, including 10¼ million members of trade unions out of the 22 million men and women at work.
I am not complaining about the need to look after minorities. I am merely saying that if minorities are important they are all important. That is partly because many of them involve far more people than seems to be the case at first sight and the ramifications of their activities are important to a large number of ordinary men and women on the shop floor.
There is no doubt of the effect, on every kind of business, of the tax which we are forced to discuss so inadequately. Those businesses which are particularly affected are the unquoted companies which employ one-third of the 22 million men and women at work—over half the employees of the private sector—and it is their jobs that are at risk—[Interruption.] Hon. Members below the Gangway will not be laughing when their constituents complain to them about the bankruptcies of their employers and the difficulties of getting new work. I am glad that those hon. Members have shown that they are opposed to any form of family business or any unquoted company, large or small.
I am worried that the tax will have an unpredictable effect upon a very large but so far unknown number of people. There is no reason to curtail discussion of it, except for the incompetence of the Government. When the Conservatives introduced major tax changes our Treasury Ministers did not find it necessary to have a guillotine. In 1971 we brought in the unification of tax and produced the option mortgage scheme, the Bill occupied 69 clauses and 14 schedules. In 1972 there were 56 clauses on VAT alone, measures on the income and corporation taxes which affected companies' distributions, and the abolition of the SET, which covered 49 clauses. There were 134 clauses and 28 schedules in all. We did not need a guillotine to get them properly discussed, because we had done the work before-

hand. I accuse Treasury Ministers of having brought in an ill-prepared scheme which was announced in the Budget but was not even worked out in time for the December Finance Bill.
The Government's laxity will punish the interests adversely affected through the failure to get adequate discussion. It is failure to discuss these matters which helps to produce bad legislation. Perhaps we are luckier than we were in 1968. At least it is only the Report stage of this Bill which is being guillotined. In 1968 it was the Committee stage, too, as far as I can remember. On the other hand, this Bill is worse than the 1968 Act, in that that Act at least damaged only individuals. Now we are not to discuss adequately and properly how this tax will damage the future of this country and adversely affect its capacity to achieve the economic recovery which we are all seeking.

5.25 p.m.

Mr. John Tomlinson: We are seeing this afternoon yet another example of the mock hysteria that the Opposition seem to be able to turn on and off like a tap. They are making complaints about lack of time to discuss the capital transfer tax and yet yesterday and this afternoon they engaged in generalised time wasting when they could have been discussing important amendments upon which they say they want to spend more time.

Mr. Patrick Cormack: Will the hon. Member accept once and for all that my right hon. and hon. Friends and I are quite prepared to sit through the night every night this week and through the weekend if necessary?

Mr. Tomlinson: I put as much value on what the hon. Member said as I did in the performance of that full-hearted opposition in Standing Committee, when, in the early hours of the morning, the Government's majority increased progressively as the light dawned. When we sat all through the night the Government's majority started off at one and went through to three, five, and seven, and finished at 11 in the small hours of the morning. The record is there for anyone to see.

Sir John Hall: Does the hon. Member recall that throughout the proceedings in Standing Committee the burden of debate was borne almost entirely by Members of the Opposition? During the early hours of the morning most Government Members were spending their time outside the Committee, turning up only for votes. They were resting while the burden of this debate was put on the Opposition.

Mr. Tomlinson: I cannot accept that the burden of debate was borne by the Opposition. I had to spend many hours there listening to Conservative Members, and I found that just as much of a burden.
What interests me about this debate and the debate yesterday is the number of allegations that have been made that the capital transfer tax has not been understood, and how this lack of understanding is a reason for the House needing more time to consider it. The exact opposite is the truth. There is a precise understanding of the effects of capital transfer tax and it is this precise understanding that has prompted the right hon. and learned Member for Surrey, East (Sir G. Howe) to try to use every device at his command to ensure that Part III of the Bill does not reach the statute book. He is motivated not by an ignorance of the tax but by the fact that he is all too familiar with it. A similar awareness on our part of the meaning of the tax has resolved us to make sure that it becomes law as soon as possible.
Some extremely insulting comments were made about my right hon. Friends, particularly my right hon. Friend the Chief Secretary and my hon. Friend the Financial Secretary. I assure all hon. Members who did not have the privilege of attending the Standing Committee and of hearing their performance, that the Ministers met with the universal respect of all Government Members and, I suspect, of many more people besides. So highly did we regard their efforts that at the end of the proceedings my hon. Friends and I were even prepared to chip in 50p so that we could buy them a drink in recognition of their valiant efforts. The glass of champage that each of them had was in recognition of their sterling performance and of the way they had

conducted themselves through the long hours.

Mr. Brian Sedgemore: Will my hon. Friend confirm that one of the reasons we drank champagne at the end of the Committee was that the tax was still basically intact, and that is what all the synthetic row was about?

Mr. Tomlinson: I agree with my hon. Friend on that score.
We were told that there were not many time-wasting devices during the Committee stage. I can remember when we spent no fewer than 8¼ hours debating multinational corporations. My right hon. Friend the Chief Secretary was seeking to take measures in the Bill to stop tax avoidance dodges and to stop the problems of transfer pricing mechanisms in multinational companies. The 8¼ hours of debate on that one item were clear evidence that substantial time wasting was going on in Committee.
The 167 Government amendments have been referred to by a number of Opposition Members. If there is to be so much concern that the Government are giving so many concessions away, my right hon. Friend will not meet much resistance from the Government benches if he decides selectively to withdraw some of those amendments in order to give the hon. Member for Blaby (Mr. Lawson), for example, more than 10 minutes per amendment for those that are left. We shall understand the difficulties that he faces.
I turn to the remarks made by the right hon. Gentleman the Member for Farnham (Mr. Macmillan), who waxed eloquent about the wrong use of a timetable motion for ill-thought-out schemes. He said that it was a Labour Government that used such a motion previously on a Finance Bill.
If we are to be concerned only with ill-thought-out schemes, let us look at some of the measures that the last Conservative Government saw fit to guillotine, and see how well thought out they were. For example, the Industrial Relations Act was not only timetabled on Report, but was guillotined in Committee and on Third Reading. I believe that even the former Leader of the Opposition, the right hon. Member for Sidcup


(Mr. Heath), admitted that that was an ill-thought-out measure. Certainly, with the passage of time, it did not do him much good. The Housing Finance Act was also guillotined by the last Government in Committee, on Report and on Third Reading, as was the Housing (Financial Provisions) (Scotland) Act. The European Communities legislation was guillotined in Committee. The counter-inflation measures, which were directly responsible for the confrontation with the miners, and thus for the fact that the Conservatives are now on the Opposition benches, were guillotined at all three stages. When people start talking about ill-thought-out measures and the necessity for not having guillotine motions on such measures, they should look into the more recent history in which they have been involved.

Sir John Hall: Does the hon. Gentleman not agree that the view has been expressed from the Opposition benches that from time to time the guillotine motion is necessary and justified? Does he also agree that it is against the general traditions of the House to guillotine a Finance Bill? Will he tell us when a Finance Bill was last guillotined by a Conservative administration?

Mr. Tomlinson: If the performances over the last two days are in accord with the general traditions of the House, I am not very impressed by them, and I do not regard them as being an important argument against the motion.
The right hon. Member for Farnham was arguing the need to consult outside interests and the paramount importance of such consultation. He spoke about the need to consult minority groups such as trade unions, as he referred to them. I remember that when his right hon. Friend the Member for Carshalton (Mr. Carr) had responsibility for such outside consultations on the Industrial Relations Act, he made a statement to the effect that he would consult on principles, but not details. That was precisely why the consultations with the trade union movement broke down.

Mr. Macmillan: Perhaps I telescoped my remarks in an effort to be brief, with the result that the hon. Gentleman misunderstood me. I was referring to taxation schemes. My argument was that

Finance Bills should never be guillotined. Part of the reason why minority interests are so important in connection with any Finance Bill is that they are often the people who are used by the Government as tax gatherers. They are the people who have to be able to work all this Bill—the shopkeepers and others.

Mr. Deputy Speaker: Order. I am sorry to interrupt the right hon. Gentleman, but the same rule must apply to everyone: short interventions, please.

Mr. Tomlinson: There is an exact parallel with the Industrial Relations Act, because that Act taxed trade unions, by the process of registration or non-registration, to the tune of £10 million. That is something we have put right in this Bill in the Committee of the whole House.
It is right that we should pass the motion. Capital transfer tax is exceedingly important to my constituents. I am sure they are all aware that the rate of capital transfer tax is lower than the rate of estate duty tax—for those who paid it. The new tax will be of substantial benefit to the majority of my constituents who paid their taxes and did not seek to avoid them. The ease of avoidance is the major reason why so many Opposition Members seek to retain estate duties and oppose the capital transfer tax.
There is an impatience on the Government side of the House—which I am sure is shared by the majority of my constituents—to get this radical taxation reform on to the statute book. It will produce a greater equity of contribution to our national economic well-being, and as such it should go on to the statute book as speedily as possible.
We can no longer countenance delay. The motion must be passed, and we must get the capital transfer tax into effect as soon as possible.

5.37 p.m.

Mr. J. Enoch Powell: There are licensed occasions for clowning, and there are also licensed occasions for humbug. It is well understood in the House that the periodical debates upon a guillotine motion belong to the latter category. Hon. Members sit scarcely concealing their cynicism when they hear the same defence and attack repeatedly from


reciprocal sides of the Chamber. But there is a certain danger in our getting used to this shuttlecock, this navette, in that we may not perceive the gradual shifting of the ground. We may not perceive an important extension of the use of the guillotine which perhaps none of us might seriously wish to accept.
It is hard to deny at this time of day that the use of the timetable motion for legislation has become an accepted part of the procedure of the House, though it is the business of every Opposition, confronted with a timetable motion, to oppose it, whatever may be the legislation to which it is applied. Indeed, I believe it would be wrong for an Opposition not to do so; and it is for that reason that in two hours or so my right hon. and hon. Friends and myself will go into the Lobby against the motion.
However, there is something special—not, unfortunately, unprecedented—about the occasion of this timetable motion. The right hon. Member for Farnham (Mr. Macmillan) was right to emphasise that the application of a timetable motion to a Finance Bill puts it into a different category.

Mr. Molloy: The argument about the Finance Bill being in a special category was advanced before the right hon. Gentleman spoke. Does he not concede that it was equally indefensible that a Bill which could unjustifiably put dockers in gaol was subjected to a guillotine motion?

Mr. Powell: I do not agree, because the financial procedure of the House is integral to its powers in a sense which cannot be predicated of any other sort of legislation.
I fancy that the curious omission of that point from the speech of the Shadow Leader of the House might have been a tacit or unconscious admission of guilt, namely, the recollection that it was the Conservative Party which had used a timetable motion in 1972, with the assistance of the Liberal Party, to force through the House what could otherwise not have been forced through—the renunciation of its exclusive right to tax. It is therefore perhaps more appropriate that this vital point about the special nature of our financial procedures should not come specific-p
ally from the official Opposition Front Bench.
The House will be poorer as a result of the passing of this motion, in a way that it is not impoverished by the passing of most other guillotine motions. As with most such motions, and most such steps of deterioration, the blame is not all on one side of the House. When the breakdown in communications, the breakdown in that understanding on which the existence and management of this Chamber depends, occurs, it is never due wholly to the default of one side.
In this case, I do not see how it can be denied that the Government have mismanaged their timetable. They were under great difficulties owing to the date of the General Election and the necessity—or so they believed—of introducing a second Finance Bill in 1974. Nevertheless, it is indisputably mismanagement to be still dealing with a Finance Bill in the House of Commons in the week before the last day for Royal Assent under the Provisional Collection of Taxes Act. Whatever else the managers of Government business should avoid, they should avoid getting themselves driven into that corner. There can be little excuse for it.
That is the Government's contribution to the failure which we are recording by having this motion before us. But there was also a false tactical decision by the official Opposition. They decided that they should mark their objection to one of the central features of the Bill by driving the Government into either guillotining the remaining stages of the Bill or abandoning the measure altogether, which for any Government would be impossible.

Sir Geoffrey Howe: I recognise the way in which my right hon. Friend seeks to put a balanced view of responsibility, but does he not acknowledge that there was a third possibility which was, and still is, open to the Government, namely, to recommit the Bill so as to allow the new tax to be considered by a Select Committee and still proceed with the measure which they must get through by the magic date next week?

Mr. Powell: Just so. The Opposition decided that they must drive the Government up against—what the right hon. and learned Gentleman has re-stated in


another form—the abandonment of the Bill, or else the repetition of the one precedent for guillotining a Finance Bill. I do not believe that the sincerity or effectiveness of their opposition to the capital transfer tax has been enhanced by that decision. It was a mistaken tactical decision which, by enforcing this motion, has impoverished the House.

Sir John Hall: It was a question not of forcing the Government to abandon their measure but of requiring them to give further consideration to complex provisions which would have far-reaching consequences and therefore of asking them to give more time by referring them to a Select Committee.

Mr. Powell: I have some reflections to offer the House in a moment which bear on that point.
Let me first re-emphasise, rather in opposition to the hon. Member for Ealing, North (Mr. Molloy), the special position of a Finance Bill and the particular undesirability of the precedent, once established, which we are broadening; for let there be no doubt that, having had a Finance Bill guillotined on two occasions, a sort of Gresham's Law will begin to operate. Oppositions will consider themselves to be doing less than is expected of them by the keenest of their supporters if, whenever there is a major element in a Finance Bill which is objectionable to them, they do not force the Government—which every Opposition can do if they want—into guillotining the Bill. The danger we face is that we shall have timetabled Finance Bills as a matter of course. [Interruption.] Does my hon. Friend the Member for St. Ives (Mr. Nott) want to prove that my argument is nonsense?

Mr. John Nott: I apologise to my right hon. Friend. It was impolite of me to make a comment from a sedentary position. However, because the Opposition feel strongly about a particular financial measure, it is not necessarily the case that by the House debating it at length the Government are forced into abandoning it.

Mr. Powell: Of course that is so. There is a difference between debating a measure thoroughly and at length and debating it in such a manner, and moving amendments to it in such a manner, that

it is evident and inevitable that the outcome will be a guillotine motion.
I return to my point that, once this precedent is broadened, it takes future Oppositions prisoner, as it were, and creates a presumption that if there is something seriously objectionable to them in a Finance Bill there must be a timetable motion. It follows all too easily from that that a timetable motion is introduced from the start, on the ground that if there is to be a timetable motion sooner or later we may as well have it at the beginning.
A timetable motion on a Finance Bill is specially damaging—my right hon. Friend the Member for Farnham made the point acutely—for the reason that the rights of minorities outside the House are specially involved in Finance Bills, perhaps more than in any other part of our procedure, with the possible exception of the Consolidated Fund, which nowadays is a fossilised part of our procedure. It is the ability of a small number of hon. Members or, as I have often known, even an individual Member, who is convinced of an injustice or an error which is capable of being remedied, to have it debated on the Floor of the House by facing the unpopularity of tiring the House and delaying it, which is one of the ultimate safeguards which we still preserve. That safeguard would be destroyed if it became accepted that a timetable motion was applicable on the same basis to a Finance Bill as to any other legislation.
I have been reflecting in the past 24 hours on the strange course of events in handling Finance Bills over the last quarter of a century. In the first few years after 1950, when I was first a Member of the House, the passage of a Finance Bill was accompanied, in Committee and on Report, by night after night of all-night sittings. It was passed by exhaustion in those early years of the 1950s. Then there was a sudden change; and for a whole series of years, although in some years there was not even a closure moved, the Finance Bill was fully debated on the Floor of the House both in Committee and on Report within reasonable hours. Then we came to the 1960s, and the fashion in the 1960s for reforming the procedure of the House by the use of Committees. We entered


upon the habit of splitting the Finance Bill and sending it upstairs for examination—so it was said at first—of the technical and relatively unimportant matters while keeping the major subjects on the Floor of the House.
I am sorry to say that we have grown beyond that. What happens now is that on the Floor of the House we have four rather dull artificial Second Reading debates, and then the examination of what really matters in the Bill is carried out hour after hour by 35 or thereabouts hon. Members upstairs.

Mr. Skinner: In the main, by the Opposition.

Mr. Powell: As the hon. Member for Bolsover (Mr. Skinner) says, in the main, by the Opposition.
The difficulty in which the Government and the House find themselves today is a result of this Committee procedure and of its impact upon the consideration of the Finance Bill. Instead of having had the intensive discussions of matters on which large numbers of hon. Members feel strongly at the proper time, in Committee on the Floor of the House, until late at night—in some cases right through the night, with the whole House having to stay up—we have put the Bill into commission. So it comes down to us on Report—with a perfectly generous allocation, by common comparison of standards, of five days—as a virtually new Bill from the point of view of most hon. Members. The hon. Member for Wycombe (Sir J. Hall) was on the same point as I am in feeling that we have not had the proper Committee consideration of the essential parts of the Bill that a Finance Bill requires. All of us who were not members of the Standing Committee have the feeling that there has been an inadequate understanding and an inadequate discussion of the central provisions of the Bill.
I hope, therefore, that we shall not in our collective wisdom treat this as just another of those timetable motions, with a smirk and a shrug of the shoulders. We have been brought face to face with a developing inadequacy in our procedure. I believe that we must bring the Finance Bill back on to the Floor of the House, where it belongs, for open-ended debate: I say that, because only when debate is

open-ended is the public opinion of the House brought to bear upon those who-seek to participate in the debate. So I believe we shall have to consider how to bring the essence of the Finance Bill back on to the Floor of the House.

Mr. Sedgemore: Is the right hon. Gentleman aware of the skilled opposition which was brought to the Bill in Committee when Opposition Members used skilled advisers? How could that kind of opposition function in the House?

Mr. Powell: Far be it from me to wish that any hon. Members who take part in debate should be less than adequately and skilfully briefed; but the hon. Member for Luton, West (Mr. Sedgemore) has reminded us of one of the applications of Parkinson's Law—that debate expands to fill the time available. A great deal of the work which was done in 160 hours in Committee would have been done in many fewer hours on the Floor of the Chamber, and would have provided that preparation for Report and Third Reading which we are lacking and which has led to the motion.
After this experience, I hope that we shall be able to knit together again that common understanding on the conduct of our business—which has to be a less than public understanding—between both sides of the House, without which our affairs, and especially our financial affairs, cannot be properly, democratically and parliamentarily discussed, and that we shall, after this motion, avoid for the future, by the common efforts of both Front Benches and by re-thinking our whole procedure in the light of the past 25 years, any repetition of what we shall do this evening.

5.55 p.m.

Mr. Dennis Skinner: I shall follow to some extent upon the remarks made by the right hon. Member for Down, South (Mr. Powell). He dealt not with this isolated issue but with the real problem of how to get controversial—and less controversial—legislation through the House. One reason why we have had this fracas during the past few days, and why such an inordinate number of points of order—usually the same ones—have been raised, is that the Opposition, particularly the Tories, came to believe in themselves after they got over the traumatic process of selecting their new


Leader. To that extent the capital transfer tax became a virility symbol, to which they could all become closely attached.
That is not to say that there would not have been a hell of a row over the capital transfer tax, but, having got over their recent trauma, they wanted more than ever to have a go. The right hon. Gentleman touched upon that when he spoke about the general problem. Nevertheless, the Tories suffered from a malaise for a long period, until the election.
So we are here today—that sounds almost like the vicar—introducing another timetable motion, and we are witnessing the usual scenes produced by the Opposition suggesting that parliamentary democracy is almost in ruins. I am thankful that I am able to say this today. I was not silly enough when I was in opposition—or, to put it more precisely, on the other side of the House—to attack a timetable motion. I might have made a few noises from a sedentary position, but I do not believe that there is anything on the record.
I regard the timetable motion as an extension or elongation of our parliamentary devices. It is there. It can be used. It can be described as unpleasant, but so can many other devices that we use. I have good reason to understand the way in which many of the devices can be used and the way in which they can be made unpleasant. I might make a few comments about it, but I am not offended by the Government's introducing a timetable motion to rescue the battered remains of a Finance Bill that has been the subject of so many concessions in Committee. There are still more to come—I am told there are 165 Government amendments and concessions.
Such was the extent of the concessions made by the Chancellor, when he was announcing that he would look at that matter, that he would deal with the other matter and that he would examine another matter raised by the Opposition, that the Financial Times Index shot up five points every time he opened his mouth. It shot up from a low point of 146 to a topside of 300 while the concessions were being made. It is perhaps significant that when the Stock Exchange smelled something in the air yesterday the Financial Times Index

dropped 14 points. I have no doubt that there are other reasons for that.
However, returning to the main question, I have the experience of the Housing Finance Committee proceedings behind me. The idea of that Bill was to collect money from approximately 6 million tenants—that is a great many taxpayers. The Government were taking half of it into the Exchequer. As the right hon. Member for Down, South said, it was a farce. My job then was not dissimilar from the job of those on the Tory Opposition benches yesterday who were trying to halt a political measure that they detested. They had to do this because they had to support those who, largely—I am careful about my words—support them and who may increasingly support them in future.
What was my job on the Housing Finance Bill? My job was to ensure that we fought to the last drop of blood. I use those words because the Government spokesman at that time was the right hon. Member for Brighton, Pavilion (Mr. Amery). Every time he opened his mouth he referred to his troops. He has never stopped doing so since. We did the job we were expected to do—for over 200 hours, night after night. This is no different, except that the rôles are reversed. We had hon. Members like the present Leader of the Opposition, who returned to her cosy little bed in time to get the television cameras lined up outside for the battle taking place at the time. We had the same sort of leader on our Committee, who found it necessary on one occasion to go home in his carpet slippers while we were slogging away upstairs.

Mr. Cormack: And the champagne?

Mr. Skinner: There was champagne. It is rather incredible but it was the Government side who drank it. The only difference was that they drank it in Committee Room No. 7—that hallowed room belonging to the Tribune Group from 4.15 on Monday. They drank champagne, not when the Bill had finished its Committee proceedings but when hon. Members like myself were slogging away in Committee. It was a farce.
It was supposed to be the essence of Opposition. I do not think it works. It is high time that the Government looked at the whole question not just of Finance Bills but of Bills, in Committee and on


the Floor of the House. They should find out the number of hours that adequately fit the measure, whether it is controversial or less controversial. Provided that the Government can muster sufficient people in the Lobby to support a timetable motion, they can do all the other things I have described. That is the key.
There are many other ways of arranging a timetable without having a guillotine. It has been done on this Bill. Hon. Members get into a frenzy about the Finance Bill. My right hon. Friend the Parliamentary Secretary to the Treasury is back in good health and spirits. His opposite number and other hon. Members who took part in exchanges have found, surprisingly without consulting me or the right hon. Member for Down, South, an adequate number of days for the Finance Bill. There is a rumour that the proposed number was different from the one that finally transpired. Consultations did not take place between all 635 Members of Parliament. The days were arranged by a relatively few people. That in itself is a restriction. We might not like it and we might resent it. But it is a restriction. A great many less important and more trivial issues that surround the issue of getting legislation on the statute book are decided by relatively few people.

Mr. Mellish: After the usual channels had got up to the mischief which my hon. Friend thinks we had, we had to produce a motion that had to go before the House, and be debated and agreed by the House. That was after we had come to the general arrangement which we suggested would be for the convenience of the House. At the end of the day it was the House that decided.

Mr. Skinner: That is precisely the point I am making. If my right hon. Friend and those who engaged in the talks with him had not found a formula that guaranteed that 300 members would troop through the Lobby at the end of this timetable motion, all those talks would be to no avail.

Mr. Nicholas Ridley: rose—

Mr. Skinner: I would like to give way to the hon. Gentleman, but while I was sitting down waiting for my right hon. Friend the Parliamentary Secretary to make his point another of my hon. Friends whispered in my ear and indicated that he wished to speak. I understand the problem. We are here for only three hours. I shall refrain from mentioning many of the other points I wanted to raise.
If the decision in June—if it is June—by the British people is different from the challenge I shall be posing to them to come out of the European Economic Community this issue will appear minuscule in proportion. If we stay in the Community we shall be taking another step towards allowing not my right hon. Friend, not even some of his more or less important right hon. Friends within the Cabinet, to take decisions about taxing our people. We shall be allowing others to take those decisions. I shall be playing my part in that argument and that issue.
If we are to get any legislation through for which the Government, in most cases, but not all, have a mandate from the people to carry through irrespective of the argument about percentage polls, we shall have to have a fresh look at our methods. At the end of the day we shall have to come back to the formula I suggested in a rather loose form; namely, to decide from the beginning that a particular measure needs a certain number of days and hours. Then all hon. Members will be able to discuss the real questions. In this case it would be the capital transfer tax, argued not from one side of the House only but from both sides in the knowledge that we were getting to the heart of the measure. If that were the case we would refine these matters to a greater degree than we are able to do through the ad hoc way in which we are attempting to act at present.

6.10 p.m.

Mr. John Pardoe: It falls to me to mark a great parliamentary event—namely, significant agreement between the right hon. Member for Down, South (Mr. Powell) and the hon. Member for Bolsover (Mr. Skinner)—and not just on the question of Europe. In speeches by both of them there was a sense


of disillusionment with our present procedures for approving and improving legislation, particularly in the remarks of the right hon. Gentlemen on the control of expenditure. I entirely agree with the right hon. Member for Down, South that the control of expenditure is a special matter in our procedures. He seeks to bring a little reason to the situation—and that, following the events of yesterday and today, is a welcome change.
In principle I am not opposed to timetabling. As the right hon. Member for Down, South pointed out, I and my Liberal colleagues supported a timetable motion on the European Communities Bill. Indeed, I can think of timetable motions which we would support again. I have argued in the House on previous occasions that there should be more timetabling so that we can consider Bills in a proper way without, as was the case with the Industrial Relations Bill, considering only a tiny part of it and then having to troop through the Lobby, without proper debate, on clause after clause. Unfortunately, such a suggestion is not possible in this House because as a legislative chamber it has sunk so low that reasonable debate is not now acceptable to the great majority of Members in all parts of the House.
We may regret the present situation. I certainly regret what has happened, but the present situation has arisen for a variety of reasons some constitutional, some historical. Certainly the solidified nature of our two-class, two-party system was obvious at the time of the Industrial Relations Act. This factor is obvious on the proposed tax, and is becoming obvious even in the Select Committee on the Wealth Tax. Again there is the question of the strength of Government patronage and the power of the Whips. This is an opinion held by Liberals, and it is held partly because we are Liberals and partly because we are members of a minority party.
Because there is no bipartisanship to important legislation, the only weapon which Oppositions have is the weapon of delay. I do not believe that it is a very effective weapon. It is not a very glorious thing to say to our constituents "I won a great battle because I stayed up until four, five or six in the morning". As the right hon. Gentleman the Chief Secretary to the Treasury will know, I do not stay

up until four or five in the morning, because if I did so my constituents would think that I was stark staring bonkers. If we cannot get our work undertaken during normal working hours, I do not think we are doing a good job.
With all the delays which the Opposition have been able to bring about over the years, the records show that the Government find it only too easy to get foolish, bad legislation through the House. In 1973 the House passed more than 60 Acts and over 2,000 statutory instruments. I wonder how many were worth passing. We are now in the throes of the third abortive—no doubt it will in the end be abortive—pensions scheme in seven years. One scheme got through all the procedures of the House, and yet another pension scheme passed virtually all the stages. Those provisions were prevented from coming into law only by the advent of chance—namely, a General Election. Such schemes would have been thoroughly bad, and I believe would have been accepted to be bad by all sides, even by their own "fathers". There are many other examples of such measures. The Industrial Relations Act and the legislation for bringing about local government reorganisation readily spring to mind.
The amendments which we are to consider in respect of the capital transfer tax are not, as the Lord President of the Council would have us believe, concessions. They have not come about because the Opposition, with splendid reason and delaying tactics, have managed to wring by force of argument some good reasonable concessions out of the Government. We shall consider the basic amendment on charities, which is a fundamental change and not just a minor or middling concession; and there is to be a fundamental change in respect of forestry operations, which does not seem to me to be a change for the better. Then there is the change in respect of political parties. It is incredible that the Government put that tax before the House of Commons without realising what they were doing to their political opponents. Now that they have realised what they were doing, they have changed that provision completely.
We have to ask ourselves why these provisions have had to be changed so greatly. Is it the fault, as some have suggested, of the benighted Government spokesmen in Committee? I do not


believe that to be the case. I do not think the right hon. Gentleman the Chief Secretary put up too bad a show. I was not in the Standing Committee for all of the time, but on the few occasions when I was present in the small hours I thought the right hon. Gentleman showed immense resilience. I believe the tax in question was a bad tax from beginning to end because it was put up to the Government by civil servants in the Inland Revenue and was a mess. In our view, the tax is not bad in its purposes, and we support some of those purposes—

Mr. Deputy Speaker: I hope the hon. Gentleman will not discuss the tax in detail but will discuss the timetable motion.

Mr. Pardoe: I have no intention of discussing the tax in detail. We shall have a few hours to discuss the tax even if the timetable motion is agreed. I am asking why the timetable motion is necessary and was seeking to emphasise that the Government amendments are not minor concessions but seek to change the tax out of all proportion.
I believe that our methods of approving and improving legislation at present are inadequate. The Standing Committee merely repeats the adversary politics which we conduct in this House. With due respect to the right hon. Member for Down, South, if we were to bring the Finance Bill back to the Floor of the House I do not think that we should do a very much better job in improving these taxes. We know what happens in Select Committees on these matters and to Green Papers on new taxes. The Green Paper on the tax credit scheme and, indeed, that on the wealth tax were appallingly amateurish. It is incredible—and would certainly appear to be incredible to any member of the United States Congress—that, the House having set up an all-party Select Committee to investigate a great new tax, the wealth tax, it is decided that it should sit once a week for two hours. That is the total sum of our labours in trying to get the tax right. If we mean business in improving legislation, we must take these matters more seriously. We certainly must treat these Green Papers seriously and examine them in detail.
The right hon. Gentleman the Lord President of the Council suggested that

the Government have a mandate for this tax. I do not know what a mandate is.

Mr. Molloy: Then the hon. Gentleman is not qualified to speak about it.

Mr. Pardoe: I do not suppose hon. Gentlemen know what a mandate is either. The right hon. Gentleman certainly said that the Government had a mandate. But there are only two ways in which he can make such a claim. The first is that the Labour Party put before the electorate a tax which was almost exactly the same as the one we now face. It did no such thing. The Chancellor of the Exchequer admitted that, while in opposition, he favoured a tax on the donee rather than on the donor. He has changed that opinion at the behest of the Inland Revenue, although that Department admitted that it carried out no adequate investigation of whether the donee or donor tax would best redistribute wealth. He cannot claim that he has a mandate because he put the tax to the people. He put to them an entirely different sort of tax, and one that we Liberals would have supported. However, I have no doubt that if we had done so the Conservatives would have been screaming and baying at us, since they are nothing more than a society for the preservation of the rich.
The second possibility is to argue that the Labour Party has a mandate because it secured a majority. At the last General Election only 39 per cent. of the people voted for the Government. My guess would be that, when all the thunder has died down, if free elections were held in any one of the Communist dictatorships east of the Iron Curtain now, more than 39 per cent. of the electorate would vote for the Government in power, with the possible exception of Czechoslovakia. That says something about our form of democracy and about any mandate which the Government claim.
If Conservative Members intend to shout down the Lord President, as they did on the question of the mandate, they will have to do something about it. They will have to ensure that the electoral procedures give a party a mandate to conduct legislation through the House.
The view of the Liberal Party is that this is the wrong tax and that it has been inadequately considered. It should be


considered by the Select Committee on the Wealth Tax, since it is part of the taxation of wealth in its entirety. The Select Committee should get down to making a professional and businesslike job of it.

6.23 p.m.

Mr. William Molloy: I suppose that it is inevitable that when a timetable motion is before the House, those who have formerly opposed such motions and the guillotine with great vehemence should suddenly discover that the idea has much relevance. As the right hon. Member for Down, South (Mr. Powell) said, we have endured this procedure for the past 30-odd years, certainly since the war, in the House of Commons when successive Governments have found it necessary to introduce guillotine motions and successive Oppositions have found the idea reprehensible, anti-democratic and a means of destroying the status and principles of the House of Commons. I accept that argument from the right hon. Member for Down, South. However, I find it repugnant and nauseating to accept that argument from the Liberal Party and the majority of the Conservative Party, because in a much more insidious way they wish to remove this problem from us altogether.
Therefore, while people such as the right hon. Gentleman, myself and some of my hon. Friends have massive disagreements on issues as to how we believe our nation should be governed and on the sort of society we want to create, we believe that the argument has been decided and that the final arbiter should be the British people and not a bunch of bureaucrats in Brussels. When we have this sort of argument, it behoves us all, irrespective of our views, to realise that it is not a bit of use pleading when the butchers of Brussels will not allow us to discuss these matters.
I want now to refer to one matter about which I disagree with the right hon. Member for Down, South. I do not believe that we can raise objections to any measure, with the exception of the Finance Bill, going through the House of Commons being guillotined or time-tabled—

Mr. Tomlinson: rose—

Mr. Deputy Speaker: The hon. Member has spoken. Others wish to speak. I have no doubt the hon. Member wishes to intervene to agree with his hon. Friend.

Mr. Tomlinson: In deference to the Chair, I shall resume my seat.

Mr. Molloy: I shall try to improve my hon. Friend's understanding privately after the debate.
If we all feel fervently about the way in which the House of Commons operates, it is logical that we should be concerned about its future. Both sides of the House will always be concerned about the measures to be debated and the manner in which we should debate them. I refer to issues which will affect the lives of all our people and end up on the statute book. People must believe that those measures will be effective for all time. However, that thought might inadvertently have running through it a thread of hypocrisy. If we experience scenes such as those which took place last night, and the furious speeches from the Opposition this afternoon, people may for the moment be indignant but they do not wish to abolish the system altogether and hand it over to someone else.
Back benchers on both sides of the House object to any form of government which takes away from us our right to express ourselves. From time to time I have felt that we should look at the principle of calling Privy Councillors ahead of back benchers. I can never see the logic of that. Occasions arise when Government supporters consider some points most important, whereas Opposition Members may not do so. We must seek a formula whereby we can acknowledge that we have different degrees of priority in our philosophy as to the legislation to be passed.
When the right hon. and learned Member for Surrey, East (Sir G. Howe) pushed through the Industrial Relations Bill, I thought it was wholly reprehensible that such a measure, touching so many lives, and resulting in men being incarcerated in gaol, should have been passed. It was so abominable that the Prime Minister of the day had to find a legal means of securing the release of our fellow men from gaol who ought never to have been put there and who never would have


been put there had it not been for the fact that the measure was pushed through the House by means of the guillotine. That is what we have against it. How can I tell working men and women in my constituency that that was not all that important and that I should not have objected to a guillotine doing that sort of thing but that I must join the Conservative Party in objecting to it on this occasion because they are very worried that certain financial strictures which are to be imposed upon a tiny minority of very wealthy people should be allowed the most massive debate?
In my view, both should be allowed a massive debate. We should try to find ways and means in this House of Commons whereby no debate is curtailed. In time, I believe that we shall evolve such a system. It does not matter whether people are members of minority parties. The fact that they are here means that their status is no less and no greater than mine, irrespective of the side of the House on which I sit. They have the right to submit their views, and no administration or official Opposition should try to impose on them and to deny them that right
We have this measure before us, and I have to acknowledge that ample time was provided in the Committee stage. My right hon. Friend the Chief Secretary made the point that he sat for hours in the Standing Committee while various provisions were discussed in detail. Members of the Opposition found the length of sittings extremely tiring. They had to retire. Apparently, at one stage, there were five Opposition Members and 16 Government supporters present. When such a situation is reached in a Committee, this House cannot be blamed for decided that certain issues should be examined in detail upstairs in Standing Committees. That was the idea, and I am sure that when that was proposed and when we examined it we assumed that the Opposition would be there, especially on an important financial matter such as this. We assumed that Tory Members more than anyone else would be there, willing to slog it out through the night, as my own colleagues did on the Housing Finance Bill. If, therefore, those Opposition Members who served on the Standing Committee, as the result of some self-denying ordinance,

decided for one reason or another that they could not attend, that is hardly a good argument for asking me to agree that there should be an extension of the time on the Floor of the House.

Mr. Cecil Parkinson: I have no wish to spoil a good story, but I hope that the hon. Gentleman will get the facts straight. For 80 per cent. of the time in Committee, the Opposition supplied the quorum. When 16 Government supporters were present on the occasion to which he referred, about 12 of them had to be dragged out of bed where they had been sleeping all night. If the hon. Gentleman cares to refer to the Official Report, he will see that almost every speech was made by an Opposition Member and that the contribution of Government supporters was either to sleep or to remain silent.

Mr. Molloy: If that is really so, I can understand why the Tory Opposition on the Committee are being described as a "bum" Opposition. They should have latched on to that. They could have ended the Committee, come to this House and complained that there was no quorum. They know that they botched their opposition in Committee, and they are now full of spleen and annoyance. They have had a traumatic experience, because the right hon. Member who misled them in that Committee has now been put in charge of leading the whole lot of them on the Floor of the House. How savage can luck be?
With one exception, I accept the arguments advanced by the right hon. Member for Down, South. I can see a great deal of sense in them. I cannot help commenting, however, that the record shows that before the right hon. Gentleman disagreed with his erstwhile colleagues he at one time was a champion of the guillotine and the timetable motion. That was when he had Front Bench responsibilities. Nevertheless, I am always prepared to welcome a genuine convert to true democracy.
I referred to my one disagreement with the speech of the right hon. Member for Down, South. That was when he said that there should never be a timetable motion on a Finance Bill but that it did not matter about other legislation. I disagree with him about that. However,


I believe sincerely that it is not beyond the bounds of possibility that right hon. and hon. Members will find means of avoiding scenes of the kind that we had last night and the business that we are going through today. It is absurd to use a number of hours to discuss whether we shall have a number of hours more to discuss a feature of any Bill. The time has come for us to find a solution. It has been going on for centuries. But it is not impossible to devise a method whereby we can improve our procedures and our ways of examining Bills which will result in legislation for our citizens.
Once we have passed this Bill, I hope that Members of all parties will get together—perhaps my right hon. Friend the Chief Whip will be able to arrange a meeting—with a view to finding new procedures whereby back benchers are not put in this position—

Mr. Marcus Kimball: On a point of order, Mr. Speaker. Is it in order for a Member of one of the minority parties to read a newspaper? I hardly feel that the Grand National has much to do with this debate.

Mr. Speaker: It is not in order to read a newspaper in the House or to bring one into the Chamber, unless it relates directly to the debate in progress.

Mr. Molloy: In defence of the hon. Member for Hamilton (Mr. Wilson), when I was making my point about minority parties I had hoped that he was nodding his agreement with what I was saying, not reading a newspaper. What is more, I wish that the hon. Member for Gainsborough (Mr. Kimball) had been listening to me instead of trying to read the newspaper over the shoulder of the hon. Member for Hamilton.
It is never easy for any back bencher to have to support his Front Bench colleagues who wish to impose a guillotine motion. We do it with great reluctance. I shall do so tonight for the reasons that I have outlined.
I hope, however, that it will not be beyond the wit of the leaders of all parties to devise a new procedure whereby we do not have to go through this traumatic experience and this absurdity,

especially after what happened last night. It must have placed an immense strain on you personally, Mr. Speaker. It could be avoided if a simple method were evolved to allow the maximum discussion of all proposed legislation, bearing in mind always, of course, that there must come a time when discussion ceases and decisions are made.

6.38 p.m.

Mr. Douglas Crawford: I do not agree with all that the hon. Member for Ealing, North (Mr. Molloy) said, but perhaps I might take up his generous remarks about the position of the minority parties.
The Scottish National Party objects to this guillotine on very simple grounds of principle. They concern the rights of a minority party. However, it is not in the minority in Scotland. We polled in excess of 200,000 votes more than the Conservatives. I do not see a Member of the Scottish Conservative Party in the House. I do not think that there has been any one of them present in this debate. [An HON. MEMBER: "Yes, there has."] I apologise if that is the case.
We are in a minority in this House, although we are not a minority in Scotland. The right hon. Member for Farnham (Mr. Macmillan) spoke about the rights of minorities. The rights of minorities are being eroded. The Scottish National Party was denied a place on the Standing Committee considering the Finance Bill. It has now been denied a place on the Standing Committee considering the Industry Bill. Our only chance to make our views known is during the Report stage on the Floor of the House. If we are denied a fair hearing, the people of Scotland, especially after the disgraceful scenes in the House on both the Labour and the Conservative benches, will join us in saying that from Scotland's point of view this House has had its day. To deny the Scottish National Party the chance to speak for Scotland, as is being done, is effectively to gag the voice of a nation.

6.40 p.m.

Mr. Alf Bates: The right hon. Member for Down, South (Mr. Powell) began his speech by saying that he was about to participate in a show of humbug. How right he was.
None of us is in principle against the idea of a guillotine motion. Certainly the Tory Party is not against the idea in principle. It was in favour of it for the Housing Finance Bill, which simply attacked council tenants, and it was in favour of it for the Industrial Relations Bill, which simply attacked trade unionists. However, it is against the idea of a guillotine motion on the capital transfer tax because that is an attack on capital.
What is so particular about this Bill that it should not be guillotined? The Opposition say that they want a lot of time to discuss the many amendments that have been put down. Why did they not simply get on and do that? We have had two days in which they could have been doing that. It is well known that the two Front Benches, through the usual channels, agreed that there should be five days on Report. That is a little longer than some hon. Members might have wished, but in the end that was agreed. So why did not the Opposition simply get on with the debate in what was an agreed fashion?
The Tory Front Bench has either lost control or found a new kind of control. Since the start of the Report stage yesterday, we have spent over three and a half hours debating a motion on the order in which we should take the clauses. That was nothing to do with capital transfer tax. The fact is that the Opposition have started filibustering. There was no vote on that motion. The Opposition simply wanted to talk for three and a half hours. We spent another two hours on a motion to delete Clause 1, which relates to value added tax. That was nothing to do with capital transfer tax. The Tories wanted to take up a further two hours to try to extend the debate. There was no vote on that motion. We then had a further debate on Amendments Nos. 2 and 3.
The matters to which I have referred had nothing to do with any desire to debate in detail the many amendments which have been put down. If the Opposition had been interested in doing that, they would have got on with it from the word "Go" yesterday. They have not done so. They are interested only in preventing the Bill reaching the statute book. That was made clear to anybody who heard the right hon. and learned Member for Surrey, East (Sir G. Howe)

on radio earlier today. The Opposition do not want this tax on the statute book, and they are prepared to use any means to prevent it.
The only course for the Government now is to introduce this timetable motion. If agreement between the two Front Benches has broken down because of the intransigence of the Opposition, that is all that the Government can do.
The Tories do not like this measure. The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) made that clear in his great praise of estate duty. He said that estate duty had been a good tax simply because it had been avoidable.
The hon. Gentleman, who contributed so well to the various stages of filibustering in Committee, introduced us to some exciting new creatures, Durham Man and Plumstead Man, but the creature we all enjoyed most was Tewkesbury Man, a gentleman who is the proud possessor of £500,000 worth of assets but is forced to get up at 7 o'clock in the morning, work in threadbare clothes, and is unable to afford holidays. Poor Tewkesbury Man is not satisfied with being passed on £75,000 without tax. He wishes to receive from the start of his life what most people have to earn during their lives.

Mr. Gwilym Roberts: I entirely agree with most of my hon. Friend's sentiments, but I feel that he is going slightly astray with his suggestion that an ordinary person who lives in a terraced house or on a Welsh mountainside could earn in a lifetime the kind of money that some of these people inherit. That is the fiction that the Tory Party tries to create. I felt that my hon. Friend was well on the mark when he spoke about the division within the Opposition. Is not the reason that the Tory Front Bench lost control that when any genuine redistribution is involved the animal teeth and claws of Tory back benchers come to the fore? Is not that what we have seen in this House?

Mr. Bates: I think that my hon. Friend puts it in much better words than I could use. I was thinking not of terraced houses in Wales but more of car workers living on council estates in Ellesmere Port. None of those supposedly overpaid people would ever manage to get anywhere near the wealth that hon. Gentlemen opposite


complain they will be unable to pass on without tax. That is why the Bill is being delayed.
Whenever I hear about Tewkesbury man, the poor individual who is unable properly to pass on his £500,000 without tax or anybody complaining about the difficulties of his wealth, I think that he is either a fool or a brigand. I think that Tewkesbury man is both.
I suggest that, because the Government's proposals have come through the Committee stage without any serious alteration, the Tories have now decided that the only weapon available to them to prevent them is a filibuster on the Floor of the House. That is why the Government have introduced the motion.

6.47 p.m.

Mr. Kenneth Baker: Any guillotine debate tends to have the character of a journey down memory lane. However, I should never have thought to hear the nostalgic reminiscences of the hon. Member for Bolsover (Mr. Skinner) about drinking champagne in Committee Room 7, because when the hon. Gentleman rises one associates him rather with the sound of tumbrels than with the tinkling of champagne glasses. For those of us on the Opposition benches who find a certain charm and delight in the continuity of tradition, it is pleasing that the spiritual heirs of Nye Bevan, whose favourite champagne was Bollinger, should keep this patrician tradition so alive.
I have some degree of sympathy with hon. Members on both sides of the House who have said that, on the whole, they do not like timetable motions. There has been a tendency for Governments of both parties in recent years to use guillotines rather too quickly. Timetable motions have to be introduced because whichever party occupies the Treasury Bench cannot resist the itch to legislate. Conservative Governments usually come in determined to do less and end up by doing more. Socialist Governments come in determined to do a great deal efficiently and end up by doing a great deal more inefficiently.
The reason for this timetable motion owes a lot not to the date by which the Finance Bill has to become an Act but to the heavy legislative programme on which the Government have embarked. The passage of this Bill would have been just

a shade easier if the Leader of the House had been just a shade more flexible. Those who know him personally outside this Chamber will know that he is not rude, discourteous or stubborn; but when he gets to that Dispatch Box some sea change takes place and he becomes all these things. He has a highly developed talent to offend. I would say of him, as was said of Parnell, that he has all the qualities of a poker except its warmth.
Turning to the rôle of the Treasury Ministers in this, there is no doubt that the procedure we adopt for the passage of tax legislation in our Finance Bills is entirely unsatisfactory. The case has been made many times by the right hon. Member for Heywood and Royton (Mr. Barnett). Some of us can remember him, when he was on the back benches in 1968 and 1969, lecturing his own Government on the need to adopt much better methods of introducing complicated taxation. We all said "Hear, hear" many times in the 1968–69 Finance Bills. We tried to show the way when we were in Government by having Green Papers which were discussed by Select Committees. I well recall that being done on tax credits and the imputation system of company taxation. He is not hostile to that scheme because the Government have set up a Select Committee on the wealth tax. This is the proper way to legislate.
The wrong way to legislate on complicated taxation, irrespective of the mandate that any Government have, is to introduce an ill-thought-out, complicated tax measure and then be determined to get it through by a specific date. The capital transfer tax should, in my view, have been subjected to a searching examination by a Select Committee and then brought forward. My right hon. Friend the Shadow Chancellor provided the means whereby the Government could have done this, by putting the capital transfer clauses into cold storage even for six months—though he was asking for one year—so that they could be subjected to proper examination. This was not done, and I agree with my hon. Friends and the right hon. Member for Down, South (Mr. Powell) about the need to examine that process of tax legislation.
I believe that we shall have to move towards a system whereby Finance Bills will deal mainly with changes in tax


rates, but changes of fundamental taxation will need separate Bills, previously examined by Select Committees which would not have upon them the enormous pressure of having to effect the introduction of the Bills by a specific day as otherwise the taxing provisions of the Act would not apply. I hope, therefore, that we shall be able to avoid in future what has happened during the course of this Finance Bill.
The right hon. Member for Heywood and Royton has been virtually rewriting the Bill upstairs. It is only because he is an experienced accountant, able to think quickly on his feet, that he has been able to give coherence to what he has said. Important parts of the Bill are now being rewritten on Report. Because, on the whole, we do not have such experts in the House, very few hon. Members can understand the details of such Bills; and many commentators outside, this week and next, will be denied a real chance to comment on these complicated provisions. This brings our whole legislative process in this House into ridicule and contempt. How can this be the best way of introducing complicated tax measures?
I end very much as I started by regretting the need for guillotine motions in general; but the particular character of this guillotine motion makes it unique. Since the war only one Finance Bill, that in 1968, has been guillotined. I believe that that was a very regrettable precedent because the unique power that we have—some hon. Members have called it a precious right, though it is more than that—is the reason why this Chamber has over the centuries acquired certain powers. It is because we have the right to deny the executive of the day, whether Tory, Liberal or Conservative, Supply before there has been adequate debate or redress of grievance. If we surrender that right we are surrendering one of the very reasons that have brought us into being as a legislative House. For these reasons I very much oppose this guillotine measure.

6.55 p.m.

Mr. Jim Marshall: I do not wish to reply in detail to the remarks of the hon. Gentleman who has just sat down, but he referred towards the end of his speech to "Tory, Liberal or Conservative". I hope that amongst

that group of three he was not referring to my right hon. and hon. Friends sitting on the Front Bench. If he was, I am sure they will correct that impression. The hon. Gentleman referred in some detail to my right hon. Friend the Leader of the House and made certain remarks about his virtues outside the House. As a colleague of my right hon. Friend I would say that within this Chamber we know him as a kind-hearted, warm and considerate man, whose great virtue is to give us all methods of expediting business through the House and for that, on this occasion, we are indebted to him.
Today I had a deputation from a group of hosiery manufacturers in Leicester. They came to the House to discuss certain aspects of the capital transfer tax. I would be maligning their case if I were to say other than that they disagreed with the tax in a number of ways, and I shall be conveying their points to my right hon. Friend the Chancellor of the Exchequer. But before they left the House today they made the point that it is not timetable arrangements or guillotine arrangements that bring this House into disrepute but the behaviour of right hon. and hon. Members both in this Chamber and upstairs which brings this House into disrepute.
The deputation told me that they thought it somewhat odd that at this time grown men and women should sit upstairs in Committee all night and in some cases all day—I forgot the hon. Member for Cornwall, North (Mr. Pardoe), who left at 12 o'clock each night, presumably to get his beauty sleep—

Mr. Pardoe: The hon. Gentleman and the right hon. Lady.

Mr. Marshall: Nevertheless, the gentlemen from Leicester made the point that it is behaviour of that kind that tends to bring this Chamber into disrepute. That was reinforced by the abysmal behaviour of certain hon. and right hon. Members last night. I telephoned my wife earlier this afternoon and she gave a further example to me. I was absent from the Chamber at the time, meeting constituents from Leicester, but my wife recited to me an example of what had been broadcast—no doubt by the BBC—of an hon. Member opposite actually striking one of my hon. or right hon. Friends. That may


not be true, but none the less it has been reported on a national television broadcasting network. If that is true—and, as I have said, I was not in the House when the incident is said to have occurred—nothing could do more to bring this House into disrepute.

Mr. Peter Snape: As one who was present at the time of the incident to which my hon. Friend refers, may I ask him whether he is aware that the hon. Gentleman opposite who reportedly committed this offence is one of the leading upholders of the doctrine of the preservation of law and order in this country—and does he agree with me that the display by the Conservative Party today would make Clay Cross Urban District Council proceedings look like a Boy Scouts' jamboree?

Mr. Marshall: I thank my hon. Friend for those pertinent and salient comments. He referred to the hon. Member for Blaby (Mr. Lawson). I know the hon. Members. He happens to be my constituency Member. Over the past six months I have been inundated with his views on law and order. But I shall come back to that matter—

Mr. Powell: On a point of order. Is it in order for a reference to be made during a debate to an alleged assault on or by an hon. Member?

Mr. Speaker: The position is that if such a thing had happened one would expect the matter to be raised as a matter of privilege. No such matter has been raised as a matter of privilege. I do not know that I can rule what the hon. Member has said as out of order, but I do not think that it is a very profitable line to pursue.

Mr. Marshall: I apologise, Mr. Speaker. I was simply reporting a conversation that I had had with my wife.
Getting back to my main argument, hon. Members opposite are deliberately trying to prevent the Government from introducing legislation for which the electorate twice gave them a mandate last year. The hon. Member for Blaby has made a statement to the local newspaper in Leicester that he and his hon. Friends would do all in their power, by delaying tactics, to prevent the implement-p
tation of the new tax rates by 14th March. Their policy is to filibuster, and it is a deliberate policy.
My right hon. Friends have to take that attitude into account, and by moving this motion they have done so. I thank them for doing so. This will not only expedite business; it will also prevent my having so many sleepless nights over the next two weeks.
Coming back to the antics of the so-called Opposition, I realise that there are deep feelings on the capital transfer tax but, having searched my soul over the last few weeks and days, I still find their antics churlish. I cannot forget the Industrial Relations Act, the Housing Finance Act, or the European Communities Act, on all three of which the debates were guillotined. The Housing Finance Act was a deliberate attack upon council tenants, the Industrial Relations Act was a deliberate attack on the trade unions, and the European Communities Act took away constitutional responsibility from this House. Nevertheless, all three were guillotined.
I have campaigned over the past 12 months, almost to the day, for the fairer distribution of wealth as well as income. I believe that the capital transfer tax, which we shall be debating later in the week—

Mr. Sedgemore: But not for long.

Mr. Marshall: —will help to bring about a fairer distribution of wealth. When that legislation reaches the statute book this Government will have carried out another pledge, and in a small but significant way I may have helped. When that happens, I shall tell the people of Leicester, "Your Labour Government, ably backed by the Labour Member for Leicester, South, have carried out another pledge."

Mr. Tomlinson: Will my hon. Friend give way?

Mr. Speaker: Order. I must tell the House that I want to call another speaker before right hon. Gentlemen from the Front Benches. I therefore hope that the hon. Gentleman will not give way.

Mr. Marshall: I appreciate your difficulties, Mr. Speaker. I conclude my case.

7.5 p.m.

Mr. Peter Emery: I am sure that the hon. Member for Leicester, South (Mr. Marshall) will forgive me if I do not follow him into discussing his conversations with his wife but deal instead with three major points which have not yet been mentioned.
First, there is no way in which the House could know it, but I handed in to the Table Office an amendment to the motion to leave out "midnight" and to insert "2 a.m." as the time for the debate to finish each day. That would have allowed hon. Members to discuss a number of major issues raised by their constituents. As the right hon. Member for Down, South (Mr. Powell) rightly said, when parts of a Finance Bill are taken in Standing Committee many ordinary back benchers cannot express the fears, doubts and concerns of their constituents.
It is unbelievable that the Leader of the House should move the motion without knowing what it involves. That is a pretty rough accusation but it was clear that this was the case when I asked him how many Government amendments were to be debated and he could not say. We know now that there are 167 Government amendments. If this debate ends at 7.30 tonight, 29 hours will be left for the rest of the Report stage. If only Government amendments were discussed, each one could be discussed for a little under 600 seconds.
Yet these are new amendments which should have the scrutiny of a Committee stage. The Government say that they are intended to meet the requirements of the Opposition, but we need to study them to see whether they are in line with the pledges given by Treasury Ministers. It must be wrong for the Government to use the guillotine to force through what are virtually 167 new pieces of legislation. The time allotment I described would operate only if there were no debate at all on the other 200 or 250 amendments.
This situation is entirely different from many other guillotine motions—

Mr. Paul B. Rose: No.

Mr. Emery: These are major financial matters, Certainly the capital transfer tax will affect the jobs of hundreds of

thousands of people. It will affect mainly small businesses, which are unlikely to be able to sustain their operations when it comes in. It has been estimated that it will affect 6 million jobs. It must be wrong to push through such a tax without adequate debate.
The motion will allow, almost ensure, that when the Bill is passed this part of the tax law will be ill-prepared, ill-thought-out, ill-advised and in many ways unjust. That the House should be forced to do that by a guillotine motion is entirely wrong.

7.10 p.m.

Sir Geoffrey Howe: Many aspects of the debate have been familiar to hon. Members in all parts of the House, but underlying the familiar elements there has been a developing strand of important argument about the way in which our parliamentary procedures can be and should be used, and are used, as the best means of resolving differences of opinion within our society in a way that seeks to reflect the will of the majority, so far as that can be identified, without overriding the interests of the minority, and that does no harm to the common understanding, as the right hon. Member for Down, South (Mr. Powell) put it, upon which all depends.
The success or failure we have in achieving that depends to some extent upon the usual channels, so affectionately and lightheartedly described by the hon. Member for Bolsover (Mr. Skinner)—sometimes and to some extent. It depends also on the extent to which we have been wise or unwise in making the changes referred to by the right hon. Member for Down, South. Speaking for myself, I thought that there was a great deal in the point he was making.
One of the pressures that is now placing these procedures under strain is one that is at the heart of the faith of the Labour Party, which is referred to, interestingly enough, in a book, to which I referred yesterday, on the procedure of the House, published in 1908 by Josef Redlich. On page 197, one of the pressures is identified as
a craving for social or economic equality.
The author said that that could threaten
the majority principle, a fundamental convention upon which all parliamentary government is built


and that that
must needs begin to lose its moral force. At the same time"—
this point was made by my right hon. Friend the Member for Farnham (Mr. Macmillan)—
and to the same degree, the principle of protection for the minority begins to suffer from decay. There is a total collapse of the system of ideas of representative government.
Those are the kind of pressures which Governments ought to consider when they bring legislation of any kind, and certainly of this kind, before the House. The extent to which we strain those conventions depends, first, upon the nature of the legislation—the essential substance and the quality of that legislation, the extent to which it has been properly considered, and, finally, the way in which it is actually handled through the House. In each of these three respects, the Government have placed undue strain upon our system. We are entitled to argue those points in resisting the motion.
First, concerning the quality of the legislation itself, the hon. Member for Meriden (Mr. Tomlinson) suggested that this legislation was to the great economic advantage of the nation. One asks, how so? No evidence has been advanced in any of the debates to suggest that it is economically advantageous to the nation. The hon. Member for Bebington and Ellesmere Port (Mr. Bates) suggested that it was beneficial because of the harm that it might do to Tewkesbury Man. But why seek to do that harm? What harm is done by him if he is one of the many people running a business, small or large, for the benefit of the nation? The truth is that the capital transfer tax is totally destructive, it threatens bankruptcy, and it is disastrous for thousands of small firms, farms, and businesses throughout the United Kingdom. As my right hon. Friend the Member for Farnham has said, it is casting the shadow of insecurity and unemployment over millions of employees in these businesses, the 6 million people to whom my hon. Friend the Member for Honiton (Mr. Emery) referred.
The capital transfer tax is threatening also—this may surprise Labour Members—to bring about a sharp reduction in choice and the quality of life for the consumers of this country. As more and more firms pass into the control of giant

public companies, or, still worse, of the State, so the quality of life is diminished. It is in no sense of jest that I refer to the comments made by the organisation concerned with the quality of British beer. It has been pointing out, quite rightly, that many small breweries, giving jobs to many people, are threatened by this tax.

Mr. Tomlinson: Tell us about the Carlisle brewery.

Sir G. Howe: I hold no brief for that brewery, whatever the hon. Gentleman may think. I want to concentrate on this tax and the damage it is doing to the quality of life in this respect.
Finally, this tax also threatens to do serious damage to voluntary organisations—that is beyond charities, and not just the political parties which, as the hon. Member for Cornwall, North (Mr. Pardoe) has pointed out, may be saved in the nick of time—and to the non-charitable public organisations which contribute a great deal to the quality of our life and which ought to be the subject of a Government amendment which has not yet been tabled. I want to quote from a document that has been submitted to many of us by the Child Poverty Action Group, which says that
it is therefore crucial that the Government should encourage a thriving voluntary sector which is free to criticise official action as well as to feed back to authority grassroots opinion on the effects Government measures are having on ordinary people…. From reading the Committee stage of the Finance Bill"—
this is the important point—
it would appear that most of your colleagues"—
the letter is addressed to the Chancellor of the Exchequer—
were unaware of the effects the proposed capital transfer tax—which CPAG supports in principle—will have on the voluntary sector.
That is another illustration of the way in which this is a thoroughly destructive, damaging tax.
Woodlands, building employers, small employers, small firms, a range of jobs, and voluntary institutions—all these things will be severely damaged. Hon. Members should not smile at that argument, which is being put powerfully by many people inside and outside the House.
That is the first important reason for seeking to prevent the measure reaching.
the statute book. The measure is misconceived. It is, quite simply, a bad tax. It has been prepared and considered and is being enacted, as my hon. Friend the Member for St. Marylebone (Mr. Baker) pointed out, with a combination of folly, arrogance and incompetence that is, mercifully, without precedent in the proceedings of this House. Not a voice has been raised in answer to the criticisms advanced by my right hon. Friend the Member for Yeovil (Mr. Peyton) about the way in which this legislation has been prepared. The Leader of the House said, as though this were an answer to all the questions, "We have a mandate to bring this in". But there is no legitimate mandate for the introduction of a measure so badly mishandled as this one.
It has never been our purpose, as the hon. Member for Leicester, South (Mr. Marshall) pointed out, to prevent the collection of existing taxes, the rates of which are altered by the Bill. Our objective has been—it is a perfectly justifiable objective—to persuade the Government, even now, to unstitch Part III, to proceed by all means with the rest by the magic date of Friday week, and to consider again the way in which they have mishandled the preparation of this tax.
I accept that there may be some point in the criticism of the right hon. Member for Down, South, suggesting that our attempt to secure that detachment need not have been the only way of handling this matter. But the fact is—I am sure that the right hon. Member would agree—that it is this incompetence in the preparation of this measure which has driven the Opposition and, therefore, this House to press as hard as we legitimately can for the removal, detachment and reconsideration of Part III. It is that which has driven the Government, through their own original mistakes, to introduce this unjustifiable timetable motion.
My right hon. Friend the Member for Yeovil referred to the criticisms advanced by Mr. Patrick Hutber in the Sunday Telegraph. He is not such an undistinguished advocate, because in the same article to which reference has been made he draws attention to the fact that over 10 years ago he was a great deal more Socialist and unwise than he is today.

He is learning wisdom from the past which far exceeds that of hon. Members opposite.
This measure has been criticised also by The Times and the Financial Times. Most important of all is the comment in The Guardian today, which says quite plainly:
For the House of Commons to discuss even the most important amendments thoroughly in the five days allotted under the Report stage will be extremely difficult…. Beyond doubt, the tax has been introduced in too much of a hurry and without sufficient public discussion…. It is in the Government's own interest, as well as the taxpayer's, to see that brand new taxes are more thoroughly discussed.
That is the central part of the indictment that we lay against the Government.
I next turn to the way in which this measure has been handled. Even without a timetable motion its history will stand as a monument to the lunatic and fruitless impatience of the Chancellor of the Exchequer and his two preachers, the Chief Secretary and the Financial Secretary. They were called upon, with fumbling conceit, to carry out his dirty work. The proper way of handling this measure was foreshadowed by the Chancellor in his Budget speech of 26th March 1974. In discussing the wealth tax he said:
I believe that it should be introduced only after a thorough public discussion about the precise form it should take, the rate at which it is levied, and its relationship with other forms of taxation."—[Official Report, 26th March 1974; Vol. 871, c. 312–13.]
Would that he had applied those same wise words to the way in which he introduced this monstrous capital transfer tax. That is the second formidable criticism that we advance of the way that this measure has been handled.
Our third criticism is that the capital transfer tax is not just an evil and envious tax but that it has been prepared with outstanding incompetence. It is now being presented to Parliament in a totalitarian fashion. The Leader of the House suggested that we were seeking to prolong the debate instead of concentrating on the merits of the argument. That is certainly not so. The debate on this measure prolongs itself. We were ready yesterday to debate the matter for very much longer than was allowed. My hon. Friend the Member for Honiton (Mr. Emery) has tabled an amendment seeking


to allow us that opportunity now. It was the Leader of the House who, without precedent, intervened at an astonishingly early hour last night to curtail our discussion. The truth is that this legislation is being forced through by what will be regarded as jackboot tactics.
The Chancellor, in his Budget Statement, in introducing this tax—perhaps he can scarcely remember what he said on that occasion—said:
I can assure them that, while I am determined to ensure that the new taxes will be effective instruments for redistributing wealth as a means to greater justice and equality in our society, I am concerned that they should operate fairly on those affected and I will listen to any reasonable representations which will help to secure this end."[Official Report, 26th March 1974; Vol. 871, c. 314.]
What hollow words those sound now. The substance of this legislation has been laid upon the Order Paper, but even now it is not complete. Only in the past two or three days have we learned that the Government, to use the Chancellor's words, are prepared to
listen to any reasonable representations …

Mr. Russell Kerr: We have not heard any.

Sir G. Howe: The hon. Member for Feltham and Heston (Mr. Russell Kerr) says that he has not heard any reasonable representations. That is the point. The Government have given no opportunity for them to be heard.
One example which the Government have acknowledged to be important in that they have introduced an amendment, is the forestry industry. All hon. Members received yesterday a copy of the telegram that was sent on Sunday 2nd March to the Chancellor which read:
The Forestry Committee of Great Britain have just seen the Government amendment to the Finance Bill. We regret the lack of consultation and the unnecessary haste …. This will have a disastrous and decisive effect on planting programmes and employment. It will make forestry uneconomic. Posterity will suffer.
How can the Chancellor sit in his place with any degree of complacency upon his face when we contrast that absurd brushing aside of any attempt to allow consultation with what he said so blandly when he introduced his Budget Statement? That sort of thing makes nonsense of the par-p
liamentary process. The whole story makes clear the commitment of the Labour Party to conduct a continuing onslaught on independent resources and an independent means of existence in this country. It has a commitment to conduct a continuing onslaught on the existence of private property. It is ruthless in its planned pursuit of equality. It cares not what damage it does to the freedoms and conventions which have held this nation together.
I close by urging Labour Members to reflect on the following proposition, to which they should harken with care. I quote:
The pursuit of equality has developed in an unprecedented manner and this fact has become one of the most important obstacles to intensive economic development and higher living standards. The negative aspects of equality are that lazy people, passive individuals and irresponsible employees profit at the expense of dedicated and diligent employees, unskilled workers profit at the expense of skilled ones, and those who are backward from the point of view of technology profit at the expense of those with initiative and talent.

Mr. Russell Kerr: That sounds like the right hon. Member for Finchley (Mrs. Thatcher).

Sir G. Howe: The hon. Gentleman says that it sounds like my right hon. Friend the Leader of the Opposition. I wish that Labour Members had listened to it more closely. It does not come from any Conservative platform or from any Conservative programme, but from the action programme adopted by the Czechoslovak Communist Party in April 1968 when, under the leadership of Dubcek, it was seeking to escape from the extremes of egalitarianism to which Marxist doctrines had led it.
It is because of our conviction that the Government are taking us down the same disastrous road that we are committed to oppose this tax with all the energy at our command.

Mr. Speaker: I have had a request from the hon. Member for Lewisham, West (Mr. Price) to allow a manuscript amendment to leave out paragraph 3. The motion must be put at 7.41 p.m. I am afraid that it does not rest in my hands whether the hon. Member will have time to move his amendment, but I will select it and it can be moved if there is time.

7.27 p.m.

The Chief Secretary to the Treasury (Mr. Joel Barnett): First, I say to the right hon. Member for Yeovil (Mr. Peyton) that my hon. Friend the Financial Secretary and I will not be too disturbed that we have not won any laurels from him. We prefer the laurels of our hon. Friends and, if I may say so, their champagne.
We have had a number of interesting contributions. We had two serious and excellent speeches from my hon. Friend the Member for Bolsover (Mr. Skinner) and from the right hon. Member for Down, South (Mr. Powell). They and a number of other hon. Members have referred to the fact that a timetable motion has been placed on the Bill. Serious problems arise when a Finance Bill is timetabled, and a number of points have been made about that by my hon. Friends. That a Finance Bill has been guillotined twice under Labour Governments is clear evidence of the kind of opposition we get when we seek to put measures on the statute book which remove tax avoidance schemes. As many of my hon. Friends will recall, a similar occurrence took place in 1968.
As the right hon. Member for Down, South said, no responsible Government can ever rule out the need at times for a timetable motion. I would have thought that the right hon. and learned Member for Surrey, East (Sir G. Howe) would be the last person in the world to rule out any such motion.
Questions have been asked about the number of Government amendments and the time that it will take to debate them. There are some 25 major Government amendments. Many of the other amendments are of a consequential nature which will be well understood by Conservative Members. The guillotine motion became inevitable, as hon. Members on both sides will recognise who are being reasonable about the matter, once the Opposition had made clear their intention to stop the capital transfer tax by all measures available to them. That became absolutely clear in Standing Committee. We spent many hours in Standing Committee and in Committee on the Floor of the House debating amendments. Including dinner breaks, we spent 160 hours in debate. Many of those amendments

could have been dealt with in a quarter of the time or less if Conservative Members had dealt with them reasonably. There is no doubt that any objective observer could have seen that.
As the right hon. Member for Down, South and others have said, it is an example of our crazy system that an Opposition—and this Opposition in particular—can be so concerned with vying with one another to see who can speak the longest so as to bring about the maximum possible pressure. That is what happened. As an operation it was interesting but not very successful. It was not a very good way of achieving a proper examination of a Finance Bill or any other Bill. Most of the major Government changes were decided well in advance of our debates in Standing Committee. Indeed, I announced that we would move those amendments before we started to debate them. The Opposition were very upset about it.
We eventually finished the Standing Committee proceedings after two days and nights, finishing at 8.30 one morning and 9.30 the following morning. There was no reason for that except that the Opposition decided that it might be a useful ploy to sit two nights on the run before we finish.
Much has been said about how good the Opposition were in Committee, what an excellent Opposition back bench team it was. They needed to be good. After all, there were only 16 of them against my hon. Friend the Financial Secretary and myself, so they needed to be reasonably good.
When we came to the Report stage, the right hon. and learned Member for Surrey, East approached it rather differently, because it was clear that he had instructions from his right hon. Friend the Leader of the Opposition. She wanted to show just how tough she was in these matters. Unfortunately for her, she did not realise how incompetent her right hon. and learned Friend was. The right hon. and learned Gentleman took the right hon. Lady literally and decided to make it quite clear by overplaying his hand, as the right hon. Member for Down, South pointed out.
The right hon. and learned Gentleman over-played his hand in a number of different ways. Many of the Opposition


amendments, especially the new clauses, could have been tabled days before they were tabled. Many of them were tabled—pages and pages of them simply by photo-stating the Committee stage amendments—late on the Thursday, and many of them after 10 o'clock that night. It was being unreasonable then to expect the workers at the Stationery Office to have the amendments printed for the Friday morning. It was synthetic anger when Tory Members came here on the Friday morning and said that the amendments were not printed.
The Opposition have disgraced themselves during the last few days. In so doing they have been led by that arch villain, the right hon. Member for Yeovil. He has excelled himself in these matters. It is no wonder that I noticed the serious members of the Opposition looking shamefaced and embarrassed last night. As the right hon. Member for Down, South said, the tactics embarrassed the House and did the House great harm.
The whole exercise of the Opposition stems, as they told us quite clearly, from the fact that they do not like the capital transfer tax. So they ran a deliberate campaign to distort and mislead the public.
On whose behalf have the Opposition been pleading so strongly? At the outset of our debates today the right hon. Member for Yeovil said that the tax should be fair. That is right, but I am bound to ask—fair to whom? He could not have meant that it should be fair to the majority of the people, because what we had before certainly was not fair to the majority of the people. The majority of people did not have enough money to pay estate duty, or they did not know how, or did not want, to avoid estate duty. Those better off were the ones who had the major relief from estate duty. Now under the capital transfer tax widows and widowers and those who paid the lowest rates of estate duty will be much better off. It is a tiny minority whom the Opposition are representing in the House.
Much has been made about forestry and woodlands. The right hon. and learned Gentleman should be aware that the amendment we have tabled, which was to some extent welcomed in Standing Committee by his hon. Friends who

understood these matters, will help all those who are genuine foresters, not those who under estate duty were using woodlands for a massive form of tax avoidance, often on their death beds. We have stopped that by the amendment we have tabled, whilst we are helping genuine foresters.
Another kind of people that Tory Members seek to help are those who had trusts and used them to avoid estate duty to a tremendous extent. Another tiny minority that the Opposition represent in the House—we saw this in Standing Committee when one Tory Member after another spoke in this regard—is the tiny minority who use the Channel Islands to avoid tax on a growing scale. Not one Tory Member spoke about the majority of other taxpayers who were paying estate duty properly.
This is the kind of Opposition we had upstairs and downstairs. The "Shadow Leader of the House", if that is his title, said that not all those affected by the capital transfer tax are plutocrats. That is absolutely true. They are not, they will be the kind of people who will be helped by the capital transfer tax, including the small traders—the really small businessmen—whom Tory Members purport to represent. There will not be very many small shopkeepers in any of our constituencies who will be hurt by the capital transfer tax.
The very reverse will be the case, because on the right hon. Gentleman's own arguments these are the people who could not afford to give away their businesses in their lifetime. They were left with their businesses when they died. Now they will pay capital transfer tax at lower rates. If they leave the business to a widow, there will be no tax. That is how they will be helped. So hon. Members opposite simply do not speak for really small traders and small businessmen.
I should have preferred it if we could have had a serious examination of the Bill, but the Opposition made it absolutely clear that that was not their intention. The right hon. and learned Gentleman foolishly let the cat out of the bag on Monday. He told us that it was their intention by every legitimate means to stop this part of the Bill from going


forward. He did not tell us that the Opposition would subject it to serious examination. That was not the right hon. and learned Gentleman's intention.
I hope that the House will take note of what my hon. Friend the Member for Bolsover and the right hon. Member for Down, South said. I think that there is a need to look at our procedures and our way of examining Bills. There may be a need to timetable Bills—preferably voluntarily—at the outset. There may be a need for Select Committees to look at Bills.
These things could be done if we had a reasonable Opposition that joined in the examination of our procedures. However, we do not have a reasonable Opposition. We have an Opposition who are thoroughly irresponsible and obstructive. If they had wished, even now they could have had three full days in which to debate the capital transfer tax. They have no wish to do so. This is an appalling Opposition. They do not represent anyone other than a tiny minority in the country. I hope that my right hon. and hon. Friends will support the motion so as to put this excellent tax on the statute book.

7.38 p.m.

Mr. Christopher Price: I beg to move, as a manuscript amendment, to leave out paragraph 3.
As your predecessor in the Chair indicated, Mr. Deputy Speaker, this is an entirely non-controversial motion. It was never intended that a motion such as this should kill motions under the Ten Minutes Rule. When the right hon. Member for Carshalton (Mr. Carr) was Leader of the House, he gave a pledge that in future this matter would be taken care of. I understand that I have the assent of both Front Benches and of many hon. Members on both sides, because the Bill with which I am concerned is about mentally retarded persons.

Amendment agreed to.

Main Question, as amended, put:—

The House proceeded to a Division—

Mr. Deputy Speaker (Mr. Oscar Murton): Order. The Chair has been informed that the Division bells are not ringing at least in part of the Palace of Westminster. In the circumstances, I shall put the Question again.

Main Question, as amended, put:—

The House divided: Ayes 296, Noes 287.

Division No. 120.]
AYES
[7.43 p.m.


Abse, Leo
Campbell, Ian
Dell, Rt Hon Edmund


Allaun, Frank
Canavan, Dennis
Dempsey, James


Anderson, Donald
Cant, R. B.
Doig, Peter


Archer, Peter
Carmichael, Neil
Dormand, J. D.


Armstrong, Ernest
Carter, Ray
Douglas-Mann, Bruce


Ashley, Jack
Carter-Jones, Lewis
Duffy, A. E. P.


Ashton, Joe
Cartwright, John
Dunn, James A.


Atkins, Ronald (Preston N)
Castle, Rt Hon Barbara
Dunnett, Jack


Atkinson, Norman
Clemitson, Ivor
Dunwoody, Mrs Gwyneth


Bagier, Gordon A. T.
Cocks, Michael (Bristol S)
Eadie, Alex


Barnett, Guy (Greenwich)
Cohen, Stanley
Edelman, Maurice


Barnett, Rt Hon Joel
Coleman, Donald
Edge, Geoff


Bates, Alf
Colquhoun, Mrs Maureen
Edwards, Robert (Wolv SE)


Bean, R. E.
Concannon, J. D.
Ellis, John (Brigg &amp; Scun)


Benn, Rt Hon Anthony Wedgwood
Conlan, Bernard
Ellis, Tom (Wrexham)


Bennett, Andrew (Stockport N)
Cook, Robin F. (Edin C)
English, Michael


Bidwell, Sydney
Corbett, Robin
Evans, Ioan (Aberdare)


Bishop, E. S.
Cox, Thomas (Tooting)
Evans, John (Newton)


Blenkinsop, Arthur
Craigen, J. M. (Maryhill)
Ewing, Harry (Stirling)


Boardman, H.
Cronin, John
Faulds, Andrew


Booth, Albert
Crosland, Rt Hon Anthony
Fernyhough, Rt Hon E.


Boothroyd, Miss Betty
Cryer, Bob
Fitt, Gerard (Belfast W)


Bottomley, Rt Hon Arthur
Cunningham, G. (Islington S)
Flannery, Martin


Boyden, James (Bish Auck)
Cunningham, Dr J. (Witeh)
Fletcher, Raymond (Ilkeston)


Bradley, Tom
Dalyell, Tam
Fletcher, Ted (Darlington)


Bray, Dr Jeremy
Davidson, Arthur
Foot, Rt Hon Michael


Broughton, Sir Alfred
Davies, Bryan (Enfield N)
Ford, Ben


Brown, Hugh D. (Provan)
Davies, Denzil (Llanelli)
Forrester, John


Brown, Robert C. (Newcastle W)
Davies, Ifor (Gower)
Fowler, Gerald (The Wrekin)


Brown, Ronald (Hackney S)
Davis, Clinton (Hackney C)
Fraser John (Lambeth, N'w'd)


Buchan, Norman
Deakins, Eric
Freeson, Reginald


Butler, Mrs Joyce (Wood Green)
Dean, Joseph (Leeds West)
Garrett, John (Norwich S)


Callaghan, Rt Hon J. (Cardiff SE)
de Freitas, Rt Hon Sir Geoffrey
Garrett, W. E. (Wallsend)


Callaghan, Jim (Middleton &amp; P)
Delargy, Hugh
George, Bruce




Gilbert Dr John
Mabon, Dr J. Dickson
Rose, Paul B.


Ginsburg, David
McCartney, Hugh
Ross, Rt Hon W. (Kilmarnock)


Golding, John
McElhone, Frank
Rowlands, Ted


Gould, Bryan
MacFarquhar, Roderick
Ryman, John


Gourlay, Harry
McGuire, Michael (Ince)
Sandelson, Neville


Graham, Ted
Mackenzie, Gregor
Sedgemore, Brian


Grant, John (Islington C)
Mackintosh, John P.
Selby, Harry


Grocott, Bruce
Maclennan, Robert
Shaw, Arnold (Ilford South)


Hamilton, James (Bothwell)
McMillan, Tom (Glasgow C)
Sheldon, Robert (Ashton-u-Lyne)


Hamilton, W. W. (Central Fife)
McNamara, Kevin
Shore, Rt Hon Peter


Hamling, William
Madden, Max
Short, Rt Hon E. (Newcastle C)


Hardy, Peter
Magee, Bryan
Short, Mrs Renée (Wolv NE)


Harper, Joseph
Mahon, Simon
Silkin, Rt Hon John (Deptford)


Harrison, Walter (Wakefield)
Marks, Kenneth
Silkin, Rt Hon S. C. (Dulwich)


Hart, Rt Hon Judith
Marquand, David
Sillars, James


Hattersley, Rt Hon Roy
Marshall, Dr Edmund (Goole)
Silverman, Julius


Hatton, Frank
Marshall, Jim (Leicester S)
Skinner, Dennis


Hayman, Mrs Helene
Mason, Rt Hon Roy
Small, William


Healey, Rt Hon Denis
Maynard, Miss Joan
Smith, John (N Lanarkshire)


Heffer, Eric S
Meacher, Michael
Snape, Peter


Hooley, Frank
Mellish, Rt Hon Robert
Spearing, Nigel


Horam, John
Mikardo, Ian
Spriggs, Leslie


Howell, Denis (B'ham, Sm H)
Millan, Bruce
Stallard, A. W.


Hoyle, Doug (Nelson)
Miller, Dr M. S. (E Kilbride)
Stewart, Rt Hon M. (Fulham)



Miller, Mrs Millie (Ilford N)
Stott, Roger


Huckfield, Les
Mitchell, R. C. (Soton, Itchen)
Strang, Gavin


Hughes, Rt Hon C. (Anglesey)
Molloy, William
Strauss, Rt Hon G. R.


Hughes, Mark (Durham)
Moonman, Eric
Summerskill, Hon Dr Shirley


Hughes, Robert (Aberdeen N)
Morris, Alfred (Wythenshawe)
Swain, Thomas


Hughes, Roy (Newport)
Morris, Charles R. (Openshaw)
Taylor, Mrs Ann (Bolton W)


Hunter, Adam
Morris, Rt Hon J. (Aberavon)
Thomas, Jeffrey (Abertillery)


Irving, Rt Hon S. (Dartford)
Moyle, Roland
Thomas, Mike (Newcastle E)


Jackson, Colin (Brighouse)
Mulley, Rt Hon Frederick
Thomas, Ron (Bristol NW)


Jackson Miss Margaret (Lincoln)
Murray, Rt Hon Ronald King
Thorne, Stan (Preston South)


Janner, Greville
Newens, Stanley
Tierney, Sydney


Jay, Rt Hon Douglas
Noble, Mike
Tinn, James


Jeger, Mrs Lena
Oakes, Gordon
Tomlinson, John


Jenkins, Hugh (Putney)
Ogden, Eric
Torney, Tom


Jenkins, Rt Hon Roy (Stechford)
O'Halloran, Michael
Urwin, T. W.


John Brynmor
O'Malley, Rt Hon Brian
Varley, Rt Hon Eric G.


Johnson, James (Hull West)
Orbach, Maurice
Wainwright, Edwin (Dearne V)


Johnson, Walter (Derby S)
Orme, Rt Hon Stanley
Walden, Brian (B'ham, L'dyw'd)


Jones, Alec (Rhondda)
Ovenden, John
Walker, Harold (Doncaster)


Jones, Barry (East Flint)
Owen, Dr David
Walker, Terry (Kingswood)


Jones, Dan (Burnley)
Padley, Walter
Ward, Michael


Judd, Frank
Palmer, Arthur
Watkins, David


Kaufman, Gerald
Park, George
Watkinson, John


Kelley Richard
Parker, John
Weitzman, David


Kerr, Russell
Parry, Robert
Wellbeloved, James


Kilroy-Silk, Robert
Perry, Ernest
White, Frank R. (Bury)


Kinnock, Neil
Phipps, Dr Colin
White, James (Pollok)


Lambie, David
Prentice, Rt Hon Reg
Whitehead, Phillip


Lamborn, Harry
Prescott, John
Whitlock, William


Lamond, James
Price, C. (Lewisham W)
Willey, Rt Hon Frederick


Latham, Arthur (Paddington)
Price, William (Rugby)
Williams, Alan (Swansea W)


Leadbitter, Ted
Radice, Giles
Williams, Rt Hon Shirley (Hertford)


Lee, John
Rees, Rt Hon Merlyn (Leeds S)
Williams, W. T. (Warringon)


Lever, Rt Hon Harold
Richardson, Miss Jo
Wilson, Alexander (Hamilton)


Lewis, Ron (Carlisle)
Roberts, Albert (Normanton)
Wilson, William (Coventry SE)


Lipton, Marcus
Roberts, Gwilym (Cannock)
Wise, Mrs Audrey


Litterick, Tom
Robertson, John (Paisley)
Woodall, Alec


Lomas, Kenneth
Roderick, Caerwyn
Wrigglesworth, Ian


Loyden, Eddie
Rodgers, George (Chorley)
Young, David (Bolton E)


Luard, Evan
Rodgers, William (Stockton)
TELLERS FOR THE AYES:


Lyon, Alexander (York)
Rooker, J. W.
Mr. Laurie Pavitt and


Lyons, Edward (Bradford W)
Roper, John
Mr. David Stoddart.




NOES


Adley, Robert
Biggs-Davison, John
Burden, F. A.


Aitken, Jonathan
Blaker, Peter
Carlisle, Mark


Alison, Michael
Boscawen, Hon Robert
Carr, Rt Hon Robert


Amery, Rt Hon Julian
Bowden, A. (Brighton, Kemptown)
Carson, John


Atkins, Rt Hon H. (Spelthorne)
Boyson, Dr Rhodes (Brent)
Chalker, Mrs Lynda


Awdry, Daniel
Bradford, Rev Robert
Channon, Paul


Bain, Mrs Margaret
Braine, Sir Bernard
Churchill, W. S.


Baker, Kenneth
Brittan, Leon
Clark, Alan (Plymouth, Sutton)


Banks, Robert
Brotherton, Michael
Clark, William (Croydon S)


Beith, A. J.
Brown, Sir Edward (Bath)
Clarke, Kenneth (Rushcliffe)


Bell, Ronald
Bryan, Sir Paul
Clegg, Walter


Bennett, Dr Reginald (Fareham)
Buchanan-Smith, Alick
Cockcroft, John


Benyon, W.
Buck, Antony
Cooke, Robert (Bristol W)


Berry, Hon Anthony
Budgen, Nick
Cope, John


Biffen, John
Bulmer, Esmond
Cormack, Patrick







Corrie, John
Johnston, Russell (Inverness)
Rawlinson, Rt Hon Sir Peter


Costain, A. P.
Jones Arthur (Daventry)
Rees, Peter (Dover &amp; Deal)


Craig, Rt Hon W. (Belfast E)
Jopling, Michael
Rees-Davies, W. R.


Crawford, Douglas
Joseph, Rt Hon Sir Keith
Reid, George


Critchley, Julian
Kaberry, Sir Donald
Renton, Rt Hon Sir D. (Hunts)


Crouch, David
Kellett-Bowman, Mrs Elaine
Renton, Tim (Mid-Sussex)


Crowder, F. P.
Kershaw, Anthony
Rhys Williams, Sir Brandon


Davies, Rt Hon J. (Knutsford)
Kilfedder, James
Ridley, Hon Nicholas


Dean, Paul (N Somerset)
Kimball, Marcus
Ridsdale, Julian


Dodsworth, Geoffrey
King, Evelyn (South Dorset)
Rifkind, Malcolm


Douglas-Hamilton, Lord James
King, Tom (Bridgwater)
Rippon, Rt Hon Geoffrey


du Cann, Rt Hon Edward
Kitson, Sir Timothy
Roberts, Michael (Cardiff NW)


Dunlop, John
Knight, Mrs Jill
Roberts, Wyn (Conway)


Durant, Tony
Lamont, Norman
Ross, Stephen (Isle of Wight)


Eden, Rt Hon Sir John
Lane, David
Ross, William (Londonderry)


Edwards, Nicholas (Pembroke)
Langford-Holt, Sir John
Rossi, Hugh (Hornsey)


Elliott, Sir William
Latham, Michael (Melton)
Rost, Peter (SE Derbyshire)


Emery, Peter
Lawrence, Ivan
Royle, Sir Anthony


Evans, Gwynfor (Carmarthen)
Lawson, Nigel
Sainsbury, Tim


Ewing, Mrs Winifred (Moray)
Lester, Jim (Beeston)
Scott, Nicholas


Eyre, Reginald
Lewis, Kenneth (Rutland)
Scott-Hopkins, James


Fairbairn, Nicholas
Lloyd, Ian
Shaw, Giles (Pudsey)


Fairgrieve, Russell
Loveridge, John
Shaw, Michael (Scarborough)


Farr, John
Luce, Richard
Shelton, William (Streatham)


Fell, Anthony
MacCormick, Iain
Shepherd, Colin


Finsberg Geoffrey
McCrindle, Robert
Shersby, Michael


Fisher, Sir Nigel
McCusker, H.
Silvester, Fred


Fletcher, Alex (Edinburgh N)
Macfarlane, Neil
Sims, Roger


Fletcher-Cooke, Charles
MacGregor, John
Sinclair, Sir George


Fookes, Miss Janet
Macmillan, Rt Hon M. (Farnham)
Skeet, T. H. H.


Fowler Norman (Sutton C'f'd)
McNair-Wilson, M. (Newbury)
Smith, Cyril (Rochdale)


Fox, Marcus
McNair-Wilson, P. (New Forest)
Smith, Dudley (Warwick)


Fraser, Rt Hon H. (Stafford &amp; St)
Madel, David
Speed, Keith


Freud, Clement
Marshall, Michael (Arundel)
Spence, John


Fry, Peter
Marten, Neil
Spicer, Jim (W Dorset)


Galbraith, Hon. T. G. D.
Mates, Michael
Spicer, Michael (S Worcester)


Gardiner, George (Reigate)
Mather, Carol
Sproat, Iain


Gardner, Edward (S Fylde)
Maude, Angus
Stainton, Keith


Gilmour, Rt Hon Ian (Chesham)
Maudling, Rt Hon Reginald
Stanbrook, Ivor


Gilmour, Sir John (East Fife)
Mawby, Ray
Stanley, John


Glyn, Dr Alan
Maxwell-Hyslop, Robin
Steel, David (Roxburgh)


Goodhart, Philip
Mayhew, Patrick
Steen, Anthony (Wavertree)


Goodhew, Victor
Meyer, Sir Anthony
Stewart, Donald (Western Isles)


Goodlad, Alastair
Miller, Hal (Bromsgrove)
Stewart, Ian (Hitchin)


Gorst, John
Mills, Peter
Stokes, John


Gow, Ian (Eastbourne)
Miscampbell, Norman
Stradling Thomas, J.


Gower Sir Raymond (Barry)
Mitchell, David (Basingstoke)
Taylor, R. (Croydon NW)


Grant, Anthony (Harrow C)
Moate, Roger
Taylor, Teddy (Cathcart)


Gray, Hamish
Molyneaux, James
Tebbit, Norman


Grieve, Percy
Monro, Hector
Temple-Morris, Peter


Griffiths, Eldon
Montgomery, Fergus
Thatcher, Rt Hon Margaret


Grimond, Rt Hon J.
Moore, John (Croydon C)
Thomas, Dafydd (Merioneth)


Grist, Ian
More, Jasper (Ludlow)
Thomas, Rt Hon P. (Hendon S)


Grylls, Michael
Morgan-Giles, Rear-Admiral
Thompson, George


Hall, Sir John
Morris, Michael (Northampton S)
Thorpe, Rt Hon Jeremy (N Devon)


Hall-Davis, A. G. F.
Morrison, Charles (Devizes)
Townsend, Cyril D.


Hamilton, Michael (Salisbury)
Morrison, Hon Peter (Chester)
Trotter, Neville


Hampson, Dr Keith
Mudd, David
Tugendhat, Christopher


Hannam, John
Neave, Airey
van Straubenzee, W. R.


Harrison, Col Sir Harwood (Eye)
Nelson, Anthony
Vaughan, Dr Gerard


Harvie Anderson, Rt Hon Miss
Neubert, Michael
Viggers, Peter


Hastings, Stephen
Newton, Tony
Wainwright, Richard (Colne V)


Havers, Sir Michael
Normanton, Tom
Wakeham, John


Hawkins, Paul
Nott, John
Walker, Rt Hon P. (Worcester)


Hayhoe Barney
Onslow, Cranley
Walters, Dennis


Henderson Douglas
Oppenheim, Mrs Sally
Warren, Kenneth


Heseltine, Michael
Osborn, John
Watt, Hamish


Hicks, Robert
Page, John (Harrow West)
Weatherill, Bernard


Higgins, Terence L.
Page, Rt Hon R. Graham (Crosby)
Wells, John


Holland, Philip
Paisley, Rev Ian
Welsh, Andrew


Hooson, Emlyn
Pardoe, John
Whitelaw, Rt Hon William


Hordern, Peter
Parkinson, Cecil
Wiggin, Jerry


Howe Rt Hon Sir Geoffrey
Pattie, Geoffrey
Wigley, Dafydd


Howell, David (Guildford)
Penhaligon, David
Wilson, Gordon (Dundee E)


Howell, Ralph (North Norfolk)
Percival, Ian
Winterton, Nicholas


Howells, Geraint (Cardigan)
Peyton, Rt Hon John
Wood, Rt Hon Richard


Hurd, Douglas
Pink, R. Bonner
Young, Sir G. (Ealing, Acton)


Irving, Charles (Cheltenham)
Powell, Rt Hon J. Enoch
Younger, Hon George


James, David
Prior, Rt Hon James



Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Pym, Rt Hon Francis
TELLERS FOR THE NOES:


Jessel, Toby
Raison, Timothy
Mr. Adam Butler and


Johnson Smith, G. (E Grinstead)
Rathbone, Tim
Mr. Spencer Le Marchant.


Question, as amended, accordingly agreed to.

Ordered,
That the following provisions shall apply to the remaining Proceedings on the Bill:—

Report and Third Reading

1.—(1) The remaining Proceedings on Consideration and the Proceedings on Third Reading

Proceedings
Time for conclusion or interruption


New Clauses not relating to capital transfer tax or estate duty, and Amendments relating to Clauses 1 to 18 and 50 to 56 and to Schedules 1 to 3 and 12.
To be brought to a conclusion at midnight on the first allotted day.


New Clauses relating to capital transfer tax or estate duty.
To be brought to a conclusion at midnight on the second allotted day.


Amendments relating to Clauses 19 to 49, new Schedules.
(a) To be interrupted at midnight on the third allotted day;


Amendments relating to Schedules 4 to 11, and Third Reading.
(b) to be brought to a conclusion at midnight on the fourth allotted day.

(2) Standing Order No. 43 (Business Committee) shall not apply to this Order.

(3) The Third Reading of the Bill may be taken immediately after the Consideration of the Bill, notwithstanding the practice of the House as to the interval between the stages of a Finance Bill.

Dilatory motions

2. No dilatory Motion with respect to, or in the course of, Proceedings on the Bill shall be made on an allotted day except by a Member of the Government, and the Question on any such Motion shall be put forthwith.

Private Business

3. Any private business which has been set down for consideration at Seven o'clock on an allotted day shall, instead of being considered as provided by the Standing Orders, be considered at the conclusion of the Proceedings on the Bill on that day, and paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the Proceedings on the Bill or, if those Proceedings are concluded before Ten o'clock, for a period equal to the time elapsing between Seven o'clock and the completion of those Proceedings.

Conclusion of Proceedings

4.—(1) For the purpose of bringing to a conclusion any Proceedings which are to be brought to a conclusion at a time appointed by this Order and which have not previously been brought to a conclusion, Mr. Speaker shall forthwith proceed to put the following Questions (but no others), that is to say—
(a) the Question or Questions already proposed from the Chair, or necessary to bring to a decision a Question so proposed (including, in the case of a new Clause or new Schedule which has been read a second time, the Question that the Clause or Schedule be added to the Bill);
(b) the Question on any amendment or Motion standing on the Order Paper in the

of the Bill shall be completd in four allotted days and (subject to paragraph 4(2) of this Order) shall be brought to a conclusion or interrupted, as the case may be, at the times shown in the following Table:—

name of any Member, if that amendment or Motion is moved by a Member of the Government;
(c) any other Question necessary for the disposal of the business to be concluded;
and on a Motion so moved for a new Clause or a new Schedule, Mr. Speaker shall put only the Question that the Clause or Schedule be added to the Bill.

(2) Proceedings under sub-paragraph (1) of this paragraph shall not be interrupted under paragraph 1(1) of this Order.

(3) If an allotted day is one to which a Motion for the adjournment of the House under Standing Order No. 9 stands over from an earlier day, the bringing to a conclusion or interruption of any Proceedings which under this Order are to be brought to a conclusion at a stated time on that day shall be deferred for a period equal to the duration of the Proceedings on the Motion under Standing Order No. 9.

(4) If a Motion for the adjournment of the House under Standing Order No. 9 stands over to Seven o'clock on an allotted day, the bringing to a conclusion or interruption, as the case may be, of any Proceedings on the Bill which, under this Order, are to be brought to a conclusion or interrupted on that day at any hour falling after the beginning of the Proceedings on that Motion shall be postponed for a period equal to the duration of the Proceedings on that Motion.

Supplemental orders

5.—(1) The Proceedings on any Motion moved in the House by a Member of the Government for varying or supplementing the provisions of this Order shall, if not previously concluded, be brought to a conclusion one hour after they have been commenced, and the last foregoing paragraph shall apply as if the Proceedings were Proceedings on the Bill on an allotted day.

(2) If on an allotted day on which any Proceedings on the Bill are to be brought to a conclusion at a time appointed by this Order the House is adjourned, or the sitting is suspended, before that time no notice shall be


required of a Motion moved at the next sitting by a Member of the Government for varying or supplementing the provisions of this Order.

Saving

6. Nothing in this Order shall—

(a) prevent any Proceedings to which the Order applies from being taken or completed earlier than is required by the Order, or
(b) prevent any business (whether on the Bill or not) from being proceeded with on any day after the completion of all such Proceedings on the Bill as are to be taken on that day.

Interpretation

7. In this Order—
allotted day" means any day (other than a Friday) on which the Bill is put down as first Government Order of the Day provided that a Motion for allotting time to the Proceedings on the Bill to be taken on that day either has been agreed on a previous day, or is set down for consideration on that day;
the Bill' means the Finance Bill.

Orders of the Day — FINANCE BILL

[1st Allotted Day]

Not amended (in the Committee) and as amended (in the Standing Committee), further considered.

Clause 3

RELIEF FOR "DO-IT-YOURSELF" BUILDERS

7.58 p.m.

Mr. Deputy Speaker (Mr. Oscar Murton): The first amendment selected is No. 377, in page 3, line 9, after 'garage' insert
'shop, workshop, outhouse, greenhouse, stable or kennel'.
With it we may discuss Amendment No. 300, in page 3, line 11, after 'it', insert
'and to the provision of a building incorporating a dwelling from which the said person intends to conduct his own business'.

Mr. David Howell: Amendment No. 377 is not moved, Mr. Deputy Speaker, under protest.

Mr. Deputy Speaker: The next amendment selected is Amendment No. 305, with which we are to take Amendments Nos. 306 and 307.

Mr. David Howell: On a point of order, Mr. Deputy Speaker. It was suggested last night, when we were discussing these matters in a rational manner before the Government began to put the strong arm on, that we should take these amendments together with the succeeding group of amendments, Amendments Nos. 8, 301, 303, 304 and 319, in the names of the right hon. Member for Down, South (Mr. Powell) and his hon. Friends. If it is for the convenience of the House, perhaps we can proceed in that way.

The Financial Secretary to the Treasury (Dr. John Gilbert): That is agreeable to us.

8.0 p.m.

Mr. J. Enoch Powell: I beg to move Amendment No. 8, in page 3, line 15, at end insert
'unless one or more new dwellings are provided by such conversion, reconstruction, alteration or enlargement'.

Mr. Deputy Speaker: I understand, in view of what has just been said, that it is convenient to discuss with this amendment the following amendments:
No. 305, in page 3, line 13, leave out 'conversion, reconstruction,'.
No. 306, in page 3, line 14, after 'reconstruction', insert 'or'.
No. 307, in page 3, line 14, leave out 'or enlargement'.
No. 301, in page 3, line 15, at end insert
'except where such conversion, reconstruction, alteration or enlargement provides accommodation for a disabled person or persons'.
No. 303, in page 3, line 15, at end insert
'except where it provides additional accommodation either as part of the existing dwelling or as a separate unit attached to or within the said dwelling'.
No. 304, in page 3, line 15, at end insert
'except where it provides additional accommodation as a separate unit attached to or within the said dwelling'.
No. 319, in page 3, line 15, at end insert
'save where such work qualifies for grants under Part II of the Housing Act 1974'.

Mr. Powell: I move the amendment with some confidence because of the course of the debate on the same point in Committee. The Financial Secretary was good enough to say at the end of that debate that he would be happy to study the clause again and come back on Report. I am inviting him to do just that. The effect of the amendment would be to realise more satisfactorily and without anomalies what is generally agreed to be the Government's object in Clause 3, namely, to ensure that where a new unit of accommodation or dwelling is provided there shall be no inequity between the instance where it is provided by a professional builder and the instance where it is provided by amateurs doing their own work.
As drafted, the clause would exclude from the benefit of the VAT refund new dwellings which were provided by self-build when they were the result of the alteration or conversion of existing buildings. I assure the House that this is a practical and in no way captious point. However it may be in other parts of the country, in Northern Ireland it is quite

common for people, with their own labour, to convert something which is not a dwelling into one or more dwellings.
In Committee, my hon. Friend the Member for Londonderry (Mr. Ross) mentioned the possibility of converting a school house into a dwelling. I have such an example clearly in mind in my constituency. In Northern Ireland a large number of small schools have, as a result of reorganisation, become superfluous and are perfectly capable of being converted into acceptable dwelling places for one or more families. Obviously this sort of work can be done, and is done, by people working in their own time.
It cannot possibly be the intention to penalise the providing of a new dwelling in that way. After all, it is an economical method of increasing the amount of accommodation with far fewer materials and much less work than are required in a new dwelling. In Committee the Financial Secretary said:
The relief that we have devised in the clause is intended to assist people who are actually creating new living space …".—[Official Report, Standing Committee A, 23rd January 1975; c. 65.]
He went on to make the matter a little more precise—to exclude extension, I take it—by referring to "constructing new housing units". It follows necessarily and logically that the hon. Gentleman should accept the principle of the amendment to fulfil his intention.
I hope that the Financial Secretary will not argue that difficulty could arise in policing the scheme or in avoiding misuse of the clause. There can be no difficulty in deciding whether a new dwelling has been created. For rating purposes, it is necessary that the new dwelling should be rated separately. There are several respects in which the existence of a new dwelling is objectively ascertained, so that there is no problem for Customs and Excise to ascertain whether an application for refund falls within the ambit of the clause.
This is by no means an academic point. Substantial numbers of people will benefit from and will be encouraged to provide new dwellings by means of conversion if this logical completion of the clause is accepted by the Minister. It would assist our proceedings and help us to reach other matters in the Bill if he


were to signify his intention to accept, at any rate in principle, what is proposed in the amendment.

Mr. Hugh Rossi: The right hon. Member for Down, South (Mr. Powell) has addressed his remarks exclusively to Amendment No. 8. I should like to refer to the amendments in the names of my right hon. and hon. Friends.
Amendments Nos. 305, 306 and 307 are grouped and I should like to add for the purpose of my comment Amendments Nos. 303 and 304, whose objective is precisely the same as that of the right hon. Member for Down, South. The intention is to add to the relief given against VAT work done for the reconstruction, alteration and conversion of buildings as well as new construction. The concept of Amendment No. 301 is the same, but it is somewhat limited as it relates only to accommodation for disabled persons. Therefore, inasmuch as those amendments are already covered by the arguments adduced by the right hon. Member for Down, South, I do not propose to detain the House by arguing about them, save to say that my right hon. and hon. Friends are perfectly prepared to support the right hon. Gentleman in his amendment.
I turn to Amendment No. 319, which is somewhat different in concept. There is an error in the print of the amendment. It refers to Part II of the Housing Act 1974. It should refer to Part VII. I took up the matter with the Public Bill Office and I believe that the error has been pointed out to the Government, so that we may proceed without difficulty.
In Committee the Financial Secretary resisted on a number of grounds amendments which proposed relief from VAT in addition to the relief where a new building was being erected. First, he said that the amendments made no distinction between useful additions to buildings and an addition where "an element of discretionary expenditure" arose. He went on in column 65 of the Official Report for 23rd January of the proceedings in Standing Committee to talk about the possibility of billiard rooms and rooms for luxury use being brought within the ambit of the amendment, and he said that for that reason he had to resist it.
The second objection which the Financial Secretary raised was that an amendment extending the relief to reconstruction, alterations and conversions would make it difficult to estimate what the cost to the Exchequer would be. His third objection was that such works, especially repairs and decorations, were difficult to police. Fourthly, he objected to amendments of the kind proposed on the basis that they would give rise to a myriad of small claims which the Customs and Excise would find it difficult to deal with. He was kind enough to say in Committee that he would be happy to study the matter again. He said that he would be particularly anxious to study again the position where the works attracted local government grants. Amendment No. 319 is precisely on that point.
Part VII of the Housing Act 1974 provides for financial assistance to be given by local authorities to those who carry out certain works of improvement, repairs and conversion when it is in the public interest that such work be carried out. Section 56 provides that grants may be made towards the cost of work required for the following matters. First, they may be made for the provision of dwellings by the conversion of houses or other buildings, which is much in line with the argument put by the right hon. Member for Down, South. Secondly, grants may be made for the improvement of dwellings; thirdly, for the repair of dwellings; and, fourthly, for the improvement of houses in multiple occupation by the provision of standard amenities.
There are various grants laid down in the Housing Act 1974 which are all directed to those specific objectives. There is an improvement grant, which is for work required for the provision or improvement of a dwelling for a registered disabled person. That relates to the area covered by Amendment No. 301. There is an intermediate grant for work which is required for the improvement of a dwelling by the provision of standard amenities. Standard amenities are defined in the Sixth Schedule to the Housing Act as the provision of a bath, a hot water supply, a sink and a water closet where those amenities do not exist. That is part of the general strategy of successive Governments to bring the housing stock up to modern standards and to make


houses suitable for everyday living. In addition, there is a special grant for works required for the improvement of a house in multiple occupation, and a repairs grant in respect of repair or replacement relating to a dwelling in a housing action area or general improvement area.
There is no need for me to go into the concepts of housing action and general improvement areas. They are areas in cities on which Parliamment has decided that money shall be spent from the public purse to rescue houses and prevent them from becoming slums so that decent conditions may be provided for the people living there.
From my brief outline of the area covered by improvement grants, I am sure that the Financial Secretary will see at once that his prime objection to extending Clause 3 is met. There is no question that public money will be wasted on frivolous or luxurious extensions to houses. We are limiting the amendment precisely to those areas in which Parliament has already determined that public money must be spent in the national interest to obtain the necessary improvement of our housing stock.
The Financial Secretary's second objection was that there would be a cost to the Revenue which would be difficult to estimate. Here again, we are meeting the point by limiting the extension of Clause 3 to areas where these grants apply. Strict criteria are laid down in the Act which must be fulfilled before the grants can be paid by local authorities. Clause 57 of the Housing Act 1974 states that the application to the local authority must contain certain information, in particular details of the work and an estimate of its cost, before a grant will be entertained. The Department of the Environment already has experience of the level and rate at which improvement grants are running. There is no open-ended commitment and no unknown quantity here. The Treasury has merely to look at the rate at which the grants are running in the Department of the Environment to see what will be the cost, and the argument that it is diffisult to estimate in advance cannot apply to this category.
8.15 p.m.
The Financial Secretary's third objection was that these matters are difficult to police. There is no question of there being any difficulty of policing, because there must be a prescribed application to a local authority in a particular form, with details of the work and estimates of the cost being specified in advance, the work being supervised by local authority employees and final certification being required by the borough surveyor or the borough engineer before the grant is paid. There is policing right the way through virtually on schedules of works.
Finally, the objection that there will be a myriad of small claims is not valid. Section 64 of the Housing Act 1974 refers to a grant of up to £2,000 for a single dwelling or, where a house is being converted into a number of separate dwellings, a grant of £2,400 for each dwelling. Following the encouragement which the Financial Secretary gave us in Committee, I entreat him to accept the amendment, which meets all the objections he raised in Committee against extending Clause 3.
I add one further argument to my case. The Government have said that it is right that public money by way of grant should be spent on doing this work. The money is given to the person carrying out the work to enable him to do it. When we give public money in that way it is a little absurd to seek to claw it back by VAT on the material used in doing that work. It is a derogation from the grant for the Government to take part of it back by way of VAT. I urge the Financial Secretary to give sympathetic consideration to the amendment.

Mr. Wm. Ross: Being fortunate, or unfortunate, enough to be a member of the Standing Committee, I have no doubt that the Financial Secretary recognises that we have here a valid point. Many right hon. and hon. Members have complained that the Financial Secretary did not write to them, but he did write to me on this matter. He sent me a most courteous letter, and the only fault with it is that he turned down my application. I do not understand why, because after the manner in which he treated us upstairs I had hoped


that he would go some way towards accepting the principle of our argument.
Some of the reasons for not doing so which the hon. Member advanced in his letter I find rather strange. He said that,
The inclusion in the scheme of relatively minor work would multiply the number of claims out of all proportion.
What on earth has that got to do with the principle? If it is a reasonable point, it is only right that the Government should make some effort to meet it. The hon. Gentleman went on to talk about
a further relatively marginal fiscal relief for such improvement work".
It is not necessarily marginal to the individual. No doubt the Treasury considers that it is marginal, but it collects hundreds of millions of pounds each year. The Financial Secretary went on to say that
almost invariably some of this would consist of repair work.
Surely this is an indication of the thinking underlying the hon. Gentleman's attitude. It would appear that the Revenue is treating individuals carrying out conversions as if they were setting out to defraud the Revenue. I do not think that the average person is a criminal, or has criminal intent. These are honest people, trying to do something for themselves. It is extremely unlikely that they would defraud anyone. The Minister went on to say that it is possible that some of the material could even be sold to another individual. The people we are speaking about are unlikely to go to that length. These are people trying to carry out a cheap job and they are extremely unlikely to try to make a business out of collecting 8 per cent. on the material. It is so ridiculous that it does not bear thinking about.
The Government seem to have the impression that they would have to police every building that has been converted. Surely it does not take that much policing to find out, in general terms, the amount of material needed in a conversion. Any master builder could tell. If a master builder is brought in to do the job, he will get a refund. I cannot see any reason why the individual should not have the same treatment. It is nonsense to say that VAT cannot be refunded if a conversion is built by the owner but it

can be refunded if it is built by a builder. There is no difference whatever to the Revenue.
It may be that in Committee we went further than giving relief for the conversion of a new housing unit. This amendment does not go as far as we sought to do then. We have made it tighter. There is no reason why the amendment should be turned down.
Often, the man who owns a large house and has retired, and whose family has grown up, finds that he has room to spare. Such a house may lend itself to subdivision into flats. That should be encouraged, especially in towns. If such a person calls in a builder to carry out the conversion work the VAT will be refunded. If he is a handy fellow and does the work himself he will not get the VAT back. This is a gross inequity, which the Government should make every effort to remedy. The amendment will meet the point easily. It should be accepted.

Mr. Ivan Lawrence: I support these amendments and am grateful to my hon. Friend the Member for Hornsey (Mr. Rossi) for his persuasive replies to the issues which were bothering the Financial Secretary in Committee. I am grateful to the Financial Secretary for keeping an open mind, at any rate until this stage. Not only in Northern Ireland are there people who are anxious that this concession should be made to cover "do-it-yourself" work. It is a matter of some amazement to me that the Government and their advisers did not think that this was important enough to warrant bringing forward a clause embodying these amendments much earlier.
I hope that the Financial Secretary will not be deterred from accepting the amendment by the fact that, traditionally, it is the Conservative Party that has been concerned with legislation that would extend the quality of life in the way that people will be able to extend the quality of their life by extending and improving their homes. I hope that he will not be deterred by the fact that it is normally the Conservatives who have supported self-reliance, which is typified by those who extend their homes in this way. I hope, also, that he will not be deterred by the fact that it is normally the Conservatives who have had respect for the


atmosphere of family life engendered among those who carry out "do-it-yourself" work, when young people often leave the television sets to help Dad instead.
Perhaps the Financial Secretary, being a Financial Secretary, will bear in mind that the improvements resulting from such work will probably increase the rateable value of premises and thereby increase the income of local authorities without affecting the Exchequer—something which the Financial Secretary and his right hon. Friends would be happy to see. I hope that the Financial Secretary will sense the strong feeling on the Opposition side of the House and in the country in favour of these concessions. If he fails to grant them it will look very much as though he is being particularly petty to millions of ordinary men and women who take pleasure in "do-it yourself" activities. I am sure that neither meanness nor pettiness is a mark of this Financial Secretary.

Mr. Andrew Bowden: I support the amendments. There are in my constituency a considerable number of self-build owners. Many of these schemes have operated for many years. The standards which were originally agreed are out of date and require improvement. I am concerned about those people who have made sacrifices and a determined effort to engage in self-build schemes. That group is determined not to be dependent on the State in any way. Its members wish to own their own homes and in many cases they have given up holidays, luxuries and pleasures to build their own houses and to become owner-occupiers. They are very much concerned with family responsibilities, determined to improve themselves and to give better opportunities and conditions to their children and other members of their family.
I hope that the Financial Secretary will give careful consideration to these amendments. Many of the people concerned have elderly relatives, particularly parents, whom they wish to incorporate into their homes as members of the family. If they are fortunate enough to obtain planning permission, and if they have a little land on which to build an additional room to bring an elderly parent into their home, this is very much

to be desired and will mean a considerable saving to the local authority. We should encourage the fact that the family is being kept together and that the responsibility is being taken by the son-in-law or by the son of the family.
Any steps taken by the Government which will actively discourage these activities will turn out to be more expensive in the long run either to central or local authority funds. I hope that the Minister will support this group of people and will give them all the help he possibly can.
I suggest that there will be little scope for anybody to fiddle the situation. Inevitably, there will be some people who will fall into this category. However, an easy check can be carried out, because whatever plans are approved must have local authority permission and details must have been submitted to the local planning committee. It would not be difficult to check the value of materials used and to compare it with the plans submitted to and approved by the planning committee. I hope that the Minister will give the most sympathetic consideration to these amendments, will give genuine help to this section of the community and will do nothing to discourage the desire to improve properties. I hope that the Government will do all they can to help these families and to make them more effective and useful members of the community.

8.30 p.m.

Mr. David Mitchell: If the Government resist this amendment, they will prevent people who wish to take advantage of self-build schemes to obtain VAT relief. I do not see how the Government can sustain such an attitude. Indeed, I am surprised that the Financial Secretary has not cut short the debate and said that he is prepared to accept the amendment. I hope that I shall encourage him to do so very shortly.
We are dealing in this amendment with a group of people who are, perhaps, among the less wealthy. They do not have the means to bring in a builder to do the work for them, but have enough initiative to undertake the work themselves. They are self-reliant people who have avoided the soft option of sticking mum or dad in a council house or an old person's bungalow. They have taken the


initiative in helping their families by creating an additional housing unit. They are the very people that society should seek to encourage.
I have in my constituency a number of people who find themselves in this situation. The Government should go out of their way to help them rather than to adopt a niggling attitude. Since I am on the subject of niggling attitudes, I should like to ask the Financial Secretary to re-examine the question of the date from which the self-build remission of VAT is to count. Is it necessary to run it right through till November? Could not he take it from the beginning of the last financial year—5th April 1974? If he did that, he would be helping a group of people who it is wholly desirable to encourage.
The Government fear abuse. However, the only excuse which can be presented for not accepting the amendments is the niggling one that one citizen might make 8 per cent. profit on the property. It is an example of the tortuous mind of the Treasury that it is more concerned with the possibility of one person abusing a rule than with encouraging 99 self-reliant citizens to get on with helping themselves.

Rev. Ian Paisley: I support the amendment. This is an important matter to Northern Ireland. A recent survey in Northern Ireland, conducted by the Housing Executive, showed that 40 per cent. of all the houses there, were not up to standard. Therefore, there is a great need to give this relief to those people who by their own efforts are prepared to bring their houses up to standard.
It was said that the local authority would have the opportunity of passing the plans. In Northern Ireland the position is centralised. The Planning Commission centralises the drafting of plans for the whole of Northern Ireland. Therefore, the Treasury has no excuse if it says that planning permission will be divided between the various local authorities and that it will be hard for the Treasury to keep in step with those who wish to claim the benefit if this concession is granted. That does not apply to Northern Ireland. This matter is of great importance to Northern Ireland, since it

affects the well-being of the majority of people there.
The matter was raised in Committee by my hon. Friend the Member for Londonderry (Mr. Ross). A promise was given that the matter would be considered and we expected a favourable response. It seems to me that since the Government spokesman has not spoken, we shall not convince him. Therefore, is he prepared to listen to all that is said and then to knock down the proposal? I trust that that is not so. However, that is the way I read the position at present.

Mr. Nicholas Ridley: How interesting it is that once the guillotine has safely fallen the Government benches become deserted. It seems that Government supporters' interest in the Bill is only that it should pass.
I support the amendments. Although I do not wish to repeat the arguments in favour, I wish to demolish the defence put up by the Financial Secretary. He was kind enough to send out advance copies of it, and I am most grateful to him.
The defence appears to be this. The Customs will look at each application on the basis that it knows roughly what materials are incorporated in the average house. Therefore, if the figure is £5,000, it can allow that relief claim to that extent. When it comes to conversions or alterations, the Customs will not know whether the conversion should have cost £1,000 or £10,000, and, therefore, an inspection will have to be made. The implication is that the Customs will not make any inspection of new houses built under the do-it-yourself VAT relief scheme. This is fallacious, because a new house can cost anything between £5,000 and £50,000, depending on its scale, and the Customs will have no idea whether every £1-worth of material which is alleged to have been incorporated in the new house has been so incorporated. If a dishonest do-it-yourself builder wishes to purchase extra materials and flog them off to his friends, VAT included, and pocket the 8 per cent. difference, he will be just as able to do that in the case of new houses as in that of conversions. In effect, we are laying the Customs and Excise open to this risk by passing the clause at all. To extend it to conversions


or alterations will in no sense increase that risk.
There is the further point that some of this will be repairs money. However, as has been pointed out, what is so dreadful about repairs? That is a matter in respect of which we ought to be prepared to allow a little money to go through which perhaps was not strictly intended under the clause.
The defence is fallacious. The Customs and Excise will be no more able to police exactly accurately the new house provisions than it will the conversion provisions about which we are talking. It is unlikely that it will be worth while to engage in flogging off VAT-free do-it-yourself materials, because the profit will be 8 per cent. at the most, and we all know that slightly suspect goods of this kind do not fetch the full market price. What is more, most of the materials will be heavy goods like cement, timber, bricks, aggregate and sand, which cost a great deal to move from one place to another. It would seem to be a hazardous business which made its profit out of shifting VAT-relieved building materials from the site of a conversion to the site of a would-be purchaser's establishment. If anyone suggested transferring such a business to his son, I should have thought that he would certainly be exempt from the capital transfer tax.

Mr. John MacGregor: We had a valuable debate in Committee on this topic, but it was one without a conclusion. The various amendments being discussed in this debate give us an opportunity to reach a constructive and useful conclusion which will benefit many people.
The main point which I wish to bring out was touched upon in Committee, but it was not fully emphasised. The Financial Secretary will remember talking about building billiard rooms or swimming pools and about the difficulty of line-drawing. One of the most important line-drawing positions relates to the situation where someone is wealthy enough to employ a builder to provide a new unit of accommodation for his mother-in-law, to provide an additional room for a child or, for that matter, to provide a billiard room or a swimming pool. He will get VAT relief. Those

who do not have sufficient income or capital to enable them to do this with the aid of a builder but have to do it themselves will not get the relief.
That leads on to two other points, especially in relation to the amendment moved by the right hon. Member for Down, South (Mr. Powell) and the amendment about housing grants. The two amendments are limited to new units of accommodation and to housing grant situations. In most cases they will have already been provided by builders. Therefore, by extending relief to the do-it-yourself builder we are assisting the more needy and less well-off. What is more, the costs will be comparatively small, as will the claims. I know that the claims point was bothering the Financial Secretary from the administrative point of view. But it follows that in both situations builders will provide that work. Therefore, we are dealing only with minority situations. But they happen to be the most worthy.
The case for these two amendments is very clear, and I hope that the Financial Secretary will be able to go a little further than he did in Committee. Amendment No. 303 was designed to deal with the situation where someone wanted to provide additional accommodation for a child, or possibly for his mother-in-law, in a house which was becoming too small but did not wish to have a separate unit. Again, this is a situation which is a worthy one and one where normally a builder would be employed. It is a situation which would be clearly identifiable. If the person does it himself, it seems reasonable to give him VAT relief. I have no doubt that the Financial Secretary will say that additional accommodation cannot be clearly defined and that the amendment is therefore defective. However, I hope that he will find some way of dealing with this situation.
8.45 p.m.
I was greatly impressed last weekend by a deputation which came to see me to talk about the difficulties relating to an appeal that had been made for funds for repairs and improvements to a church. The VAT to be paid would make all the difference, in terms of the amount that they had raised on the appeal, to whether they could go ahead because they would need to make a separate appeal to raise the VAT. That


situation is relevant to these amendments. It may be that the 8 per cent. VAT will make all the difference to people without much additional income or capital going ahead with repairs or maintenance.
For these various reasons, I believe that we have offered to the Financial Secretary in this batch of alternatives the opportunity to cap what he generously said in Committee on this matter by finding some way to meet the objectives of putting into legislation something that is worth while.

Dr. Gilbert: We have had a useful and welcome temperate debate after some of the excitement earlier today. It is almost a relief to get back to the Finance Bill.
It is certainly useful to take these groups of amendments together. Amendments Nos. 303 and 304 are virtually identical with Amendment No. 8 moved by the right hon. Member for Down, South (Mr. Powell). Amendment No. 319, in the name of the hon. Member for Hornsey (Mr. Rossi), merely qualified the relief to make it available for work which qualified for grant under Part VII of the Housing Act 1974. Amendments Nos. 305, 306 and 307 have much the same effect as Amendment No. 8, though without specifying, as that amendment did, that a new dwelling had to be created.
I accept without reservation that the spirit of these amendments is at one with the Government's intention under the clause. I should not attempt to resist that proposition. However, there are difficulties. I must ask the House to accept my assurance that I have looked at the situation again between the Committee stage and Report.
The right hon. Member for Down, South suggested, for example, that there was no difficulty for the Customs and Excise in deciding whether an application for a refund fell within the clause. I could probably agree so far as that goes, but the difficulty arises in deciding whether the amounts are appropriate for relief. I am sure the right hon. Gentleman will accept that the Customs and Excise has to police any scheme of relief carefully and responsibly.
I am certain that in the part of the United Kingdom represented by the right hon. Gentleman and his hon. Friend the Member for Londonderry (Mr. Ross) and the hon. Member for Antrim, North (Rev. Ian Paisley) there are cases where old farm houses, and so on, are constantly being converted to make living accommodation. The problem is that almost invariably in such situations there will be a considerable element of repair and maintenance. I remind the right hon. Gentleman that repair and maintenance are still standard rated whether carried out by a do-it-yourself house builder or by a builder acting on instructions from a house owner. There will have to be checks on the quantities of materials involved to assess the reasonableness of the claims that are being made. The majority of taxpayers in this country are overwhelmingly honest in relation to both direct and indirect taxation but one has to recognise, and to guard against, the fact that there are people who are not quite as forthcoming as they might be in paying their taxes; and it is not impossible that some material might accidentally have been used in a building other than that for which a claim is being made. Again, it is the responsibility of Customs and Excise to police situations to see that such evasion—or, worse than that, a fraudulent claim—does not get past them.
The hon. Member for Hornsey moved an amendment with respect to houses qualifying for local authority grants. I entirely accept that his amendment is within the spirit of Clause 3. I have no difficulty at all in doing so but it is possible that he may be under a slight misapprehension with regard to this particular set of circumstances, because grants from a local authority also cover the VAT element in the proportion of the total cost covered by the grant. The only VAT that remains to be paid by the taxpayer is that which arises on the proportion of the cost of the project which is not covered by the grant. Here again we have the same kind of problem to which I referred in my answer to the right hon. Gentleman.

Mr. Michael Morris: I do not quite understand the hon. Gentleman, because surely he knows that a local authority, as he rightly said, goes through in great detail a submission from an applicant, chopping off


what relates to repairs and maintenance and segregating that from improvement. Local authorities already do that in great detail and ask for full receipts and come back and check when the work is done, so that I do not think that the Financial Secretary's proposition stands up.

Dr. Gilbert: I do not think that the hon. Gentleman quite sees my point. It is precisely that part which the local authority has policed that is reimbursed to the taxpayer, and on that part the local authority is also reimbursing VAT. It is the other part that a local authority puts on one side as ineligible for reimbursement that we are discussing, and that is where the proposed relief would apply. A local authority will say "This is improvement, and that is repairs and maintenance." As I have told the right hon. Member for Down, South that is the problem with which we are concerned.

Mr. Rossi: I do not quite follow the hon. Gentleman's arithmetic. Let us assume that the total cost of the work required is £6,000, including VAT, and the grant is a maximum of £2,000, leaving the person doing the work to pay the other £4,000 out of his own pocket. If there were no VAT to be paid it would be £4,000 minus the sum attributable to VAT materials.

Dr. Gilbert: We are at one in relation to the element not covered by the local authority grant where there would be an element of VAT. I am not disputing that with the hon. Gentleman. His hon. Friend put lucidly and forcibly that it is the element that the local authority has winnowed out as not eligible for the grant that we are talking about but again we have problems of policing in relation to repair and maintenance costs. The hon. Member for Londonderry (Mr. Ross) has said that there is a great anomaly here. He drew attention to the fact that if work were done by a builder he could get relief from VAT, and I accept that. That is a continuing anomaly in the situation and I would not for a moment attempt to deny the force of what the hon. Gentleman says. But in such policing there is a very difficult borderline between an alteration and repairs and maintenance as far as builders are concerned. I am advised that even with their experience they have very consider-p
able difficulty in their daily work. In some circumstances a piece of work may have elements on both sides of the borderline, and, therefore, the treatment of materials may have to vary from situation to situation. It would be all the more difficult for the private individual to determine who was not engaged on that sort of work as part of his everyday trade.
The hon. Member for Burton (Mr. Lawrence) did not make his points in a partisan way but he drew a lot of attention to the Conservative Party and the quality of family life and said that I should be particularly mean and petty if I resisted this group of amendments. It is only fair to remind him and his hon. Friends that it is we who are relieving the do-it-yourself builder from VAT in the first place. I am sure that he does not need reminding who imposed VAT on the do-it-yourself builder a couple of years ago. So let us hear a little less about the care and quality of family life.
We heard much the same from the hon. Member for Brighton, Kemptown (Mr. Bowden). Of course one accepts that it is a valuable social development for people to take elderly relatives into their homes, and we want to encourage it. To suggest, as he did, that the Government are "actively discouraging" that trend when, in fact we are relieving VAT rather than imposing it is stretching the case a little far.
The hon. Member for Cirencester and Tewkesbury (Mr. Ridley), as so often, got to the nub of the matter when he asked "Why not repairs?" The problem there, too, is that if repairs were included it would be impossible to establish a borderline between repairs and decorations. One could often say that decorations and repainting could be considered part of keeping a house in good order and, therefore, would be an appropriate subject for relief.
If relief were extended in that way, the Revenue cost would be about £100 million a year, even at the new standard rate of 8 per cent.

Mr. Ridley: With respect, I did not argue that case. What I asked was: if the Customs and Excise could not distinguish between genuine and ungenuine materials in the case of conversions and alterations, how could it do so in the case


of new houses, which would qualify under the clause as drafted?

Dr. Gilbert: I was coming to that point as well, but I think that, in an aside, the hon. Gentleman said "Why not repairs?" I am sure that he will be the first to accept that the last Government felt unable to go even a part of the way that we have gone.
The hon. Member seemed to assume that there would be no inspection of new houses. I have to correct him slightly on that. There will be a proportion of visits, spot checks, to new houses, particularly those which are the subject of large claims. As he said, there could be a large claim for relief on a very expensive house. By and large, Customs will go on a standard amount of building materials for a house or a bungalow with a given number of rooms. But in a very large claim for an expensive house of the sort to which the hon. Gentleman referred, there would be from time to time spot visits to judge the reasonableness of the claim.
But when we are talking about small additions and extensions, any scheme of policing would mean a series of ad hoc visits. I must ask hon. Members to accept that it would be undesirable to amend the clause. I make that request with considerable reluctance, but I am sure that they will recognise that a relief scheme must operate efficiently and economically and with propriety. It is not just a question of convenience for the staff of Customs and Excise. It is really a question whether a scheme of relief can be operated at all.
9.0 p.m.
The scheme we are proposing is a new departure. For the first time we are saying to the public "You may make a claim for relief from VAT, send in documents and write to Customs and Excise and get relief if your claim is adjudged to be valid." There will be for many members of the public problems of assembling evidence and producing invoices, which may go back over a considerable period. As hon. Members know, it takes a long time to build one's own house.
Therefore, for the time being I think that we have to confine this scheme to whole houses. It will be extremely diffi-p
cult —I make no bones about it—for Customs and Excise even to operate a scheme of this sort. We think that it will be just about practicable. But if it were to be extended to conversions, alterations and repairs, as I say, the scheme would be totally unworkable.
The best course for us is to get the scheme started. It may well be—I hope that it will be—that the difficulties that we anticipate will be much fewer than I fear at present. It may be that before too long we can look at the situation again.
I assure the House that I shall look at the matter very sympathetically. I hope that the House will accept that assurance because, after all, it is we who are introducing this relief. As I say, the problems of VAT on do-it-yourself builders are not of our making. The relief we are introducing under the clause will be of great benefit to many people. It would be irresponsible of me now to agree to changes, however well intentioned, for purposes which I myself would be the first to applaud but which might have the effect of jeopardising the whole scheme.

Mr. David Howell: I think that the Financial Secretary will agree that there really is an element of lunacy in the position that he has now taken up on behalf of the Government by discouraging and turning down the amendments of the right hon. Member for Down, South (Mr. Powell) and my hon. Friends.
Just to make it absolutely clear to the House—because it was not, perhaps, clear from the emollient words of the Financial Secretary—what madness we are about, let us recapitulate the situation as it stands. It is that for those who can afford to hire builders to add extensions to their houses, however large and for whatever purposes, virtually, VAT is allowed. Whether the extension be a billiard room or some luxury expansion of a kind which would be disapproved of and frowned upon by some of the puritan spirits on the Government side, or whether it is a minor extension, as long as builders and contractors can be hired, VAT is allowed. That is the position for those who can afford to hire a building firm. But for the do-it-yourself lot—for those who do not have the money to throw around on bringing in a firm, accepting


its estimate, and so on—the provision, as the Bill stands unamended, would be only for whole new houses.
That is a patently absurd position. It is absurd for a number of reasons, one of which is that the whole thrust of housing policy, certainly on the part of my right hon. and hon. Friends, has been to encourage the improvement of terrace houses, of dwellings that in a previous era might have been swept aside by some enthusiastic planner and redeveloper but are now reckoned, with intelligent improvement, as capable of being made adequate and, indeed, in some cases, more than adequate dwellings.
This is obviously a major aim of housing policy. It is perhaps more of an aim now than it was a few years ago. It does not need me to reinforce the experience of the right hon. Member for Down, South and his hon. Friends that in Northern Ireland, and the cities there, in particular, there are many houses and homes where the prime need, and sometimes the only choice, is to recreate the home by reconstruction, by alteration or by some extension of the kind that is ruled out from qualifying under subsection (3)(b).
That is the idiocy of the situation. It makes no sense. I know that the Financial Secretary knows that. It could be detected in the way that he tried to defend the present position. But he comes back to the difficulty of policing, and of how Customs and Excise could be sure that this bit of wood would be used for an extension and that that bit would be used for internal repair and decoration, and how could the problem of size be solved. Those have been the flimsy grounds on which the Financial Secretary has tried to defend the present position.
In Standing Committee his hon. Friend the Member for Llanelli (Mr. Davies) raised the idea of establishing the criterion of planning permission. The Financial Secretary said that he would be prepared to give Clause 3 some frenetic study before Report. Obviously he has done so and has found that his frenetic study has not allowed him to come to any conclusions.
My hon. Friend the Member for Hornsey (Mr. Rossi) has moved a much more powerful case, and one that has gone

quite unanswered. My hon. Friend suggested that the basis used should be the same as that which was used for improvement grants under the 1974 Act. That would clearly and specifically limit the relief to areas in which public money should be spent. That is an unequivocal and easily recognisable criterion. Presumably the Minister believes that the ground on which he seeks to defend his case is defensible. If that is so, I would have thought that my hon. Friend advanced a much more defensible situation with great skill.
Another argument that came up in Standing Committee, which is perhaps relevant, is that the Financial Secretary and the drafters of the Bill may have in mind altogether the wrong concept when they talk about "do-it-yourself". It was one of the Financial Secretary's hon. Friends who suggested that Ministers and the Treasury really meant "self-built". Would not that definition solve for them the problem of sitting up at night and worrying about all the small items which would be unpoliceable and which would get through the net and qualify for relief? Surely that would be the position if the Financial Secretary were to yield to the amendment.
When I heard that argument in Committee I thought that it had some validity. I was suspicious in the first place to see the DIY phrase pop up in the Bill. One has a vision of someone in the Treasury, or perhaps one of the Ministers on the Treasury Bench, noticing after some years that do-it-yourself has become fashionable, and at once beginning to rush around saying "This is what we must have in the Bill." It may be a little late in the day to discover the fashion and the techniques relating to do-it-yourself.
I do not know whether Labour Ministers indulge in do-it-yourself. I do not know whether the Financial Secretary is handy with a pot of emulsion paint, or whether he does a little extension work or conversion work to his own house. If there had been more familiarity on the Treasury Bench with the way that these things are done the difficulties might have been realised. I suppose it is too late to correct the definition. That is a pity. The Government could have solved the problem about the do-it-yourself industry being involved in


VAT relief by going for the phrase "self-built." I suspect that there was a little misunderstanding.
All in all, the right hon. Member for Down, South made a powerful case for the situation in Northern Ireland. Of course, it is a case that applies everywhere. I would have thought that the amendments were satisfactory, in that where dwellings are provided by conversion, reconstruction, alteration or enlargement they must come within the terms of what the Financial Secretary was proposing in Committee. I do not see how the hon. Gentleman can reject them. I also think that the suggestion of my hon. Friend the Member for Hornsey to use the improvement grant criterion would provide a far better borderline than anything

thing that the hon. Gentleman has put forward.

All in all, I think that my hon. Friends have presented not only a demolition of the flimsy arguments of the Financial Secretary but a far better basis on which the Government could police and operate this levy than the one that the Government have put forward. I think that the Government and the Financial Secretary have made a mistake by not reconsidering this matter as we suggested in Standing Committee. I strongly urge my right hon. and hon. Friends to support the amendments, as I believe they make sense.

Question put, That the amendment be made:—

The House divided: Ayes 264, Noes 284.

Division No. 121.]
AYES
[9.11 p.m.


Adley, Robert
Durant, Tony
Hicks, Robert


Aitken, Jonathan
Eden, Rt Hon Sir John
Higgins, Terence L.


Alison, Michael
Edwards, Nicholas (Pembroke)
Holland, Philip


Amery, Rt Hon Julian
Elliott, Sir William
Hooson, Emlyn


Atkins, Rt Hon H. (Spelthorne)
Emery, Peter
Hordern, Peter


Awdry, Daniel
Evans, Gwynfor (Carmarthen)
Howe Rt Hon Sir Geoffrey


Bain, Mrs Margaret
Ewing, Mrs Winifred (Moray)
Howell, David (Guildford)


Baker, Kenneth
Eyre, Reginald
Howell, Ralph (North Norfolk)


Banks, Robert
Fairbairn, Nicholas
Howells, Geraint (Cardigan)


Beith, A. J.
Fairgrieve, Russell
Hurd, Douglas


Bell, Ronald
Farr, John
Irving, Charles (Cheltenham)


Berry, Hon Anthony
Fell, Anthony
James, David


Biffen, John
Finsberg Geoffrey
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)


Biggs-Davison, John
Fisher, Sir Nigel
Jessel, Toby


Blaker, Peter
Fletcher, Alex (Edinburgh N)
Johnston, Russell (Inverness)


Bowden, A. (Brighton, Kemptown)
Fookes, Miss Janet
Jones Arthur (Daventry)


Boyson, Dr Rhodes (Brent)
Fowler Norman (Sutton C'f'd)
Jopling, Michael


Bradford, Rev Robert
Fox, Marcus
Joseph, Rt Hon Sir Keith


Braine, Sir Bernard
Fraser, Rt Hon H. (Stafford &amp; St)
Kellett-Bowman, Mrs Elaine


Brittan, Leon
Freud, Clement
Kilfedder, James


Brotherton, Michael
Fry, Peter
Kimball, Marcus


Brown, Sir Edward (Bath)
Galbraith, Hon. T. G. D.
King, Evelyn (South Dorset)


Bryan, Sir Paul
Gardiner, George (Reigate)
King, Tom (Bridgwater)


Buchanan-Smith, Alick
Gardner, Edward (S Fylde)
Kitson, Sir Timothy


Buck, Antony
Gilmour, Rt Hon Ian (Chesham)
Knight, Mrs Jill


Budgen, Nick
Gilmour, Sir John (East Fife)
Lamont, Norman


Bulmer, Esmond
Glyn, Dr Alan
Lane, David


Burden, F. A.
Goodhart, Philip
Langford-Holt, Sir John


Butler, Adam (Bosworth)
Goodhew, Victor
Latham, Michael (Melton)


Carlisle, Mark
Goodlad, Alastair
Lawrence, Ivan


Chalker, Mrs Lynda
Gorst, John
Lawson, Nigel


Channon, Paul
Gow, Ian (Eastbourne)
Le Marchant, Spencer


Churchill, W. S.
Gower Sir Raymond (Barry)
Lester, Jim (Beeston)


Clark, Alan (Plymouth, Sutton)
Grant, Anthony (Harrow C)
Lewis, Kenneth (Rutland)


Clark, William (Croydon S)
Gray, Hamish
Loveridge, John


Clarke, Kenneth (Rushcliffe)
Grieve, Fercy
MacCormick, Iain


Clegg, Walter
Griffiths, Eldon
McCusker, H.


Cockcroft, John
Grimond, Rt Hon J.
Macfarlane, Neil


Cooke, Robert (Bristol W)
Grist, Ian
MacGregor, John


Cope, John
Grylls, Michael
Macmillan, Rt Hon M. (Farnham)


Cormack, Patrick
Hall, Sir John
McNair-Wilson, M. (Newbury)


Corrie, John
Hall-Davis, A. G. F.
McNair-Wilson, P. (New Forest)


Costain, A. P.
Hamilton, Michael (Salisbury)
Madel, David


Craig, Rt Hon W. (Belfast E)
Hampson, Dr Keith
Marshall, Michael (Arundel)


Crawford, Douglas
Hannam, John
Marten, Neil


Critchley, Julian
Harrison, Col Sir Harwood (Eye)
Mates, Michael


Davies, Rt Hon J. (Knutsford)
Harvie Anderson, Rt Hon Miss
Mather, Carol


Dean, Paul (N Somerset)
Hastings, Stephen
Maude, Angus


Dodsworth, Geoffrey
Havers, Sir Michael
Mawby, Ray


Douglas-Hamilton, Lord James
Hawkins, Paul
Maxwell-Hyslop, Robin


du Cann, Rt Hon Edward
Hayhoe Barney
Mayhew, Patrick


Dunlop, John
Henderson, Douglas
Meyer, Sir Anthony




Miller, Hal (Bromsgrove)
Rees-Davies, W. R.
Steen, Anthony (Wavertree)


Miscampbell, Norman
Reid, George
Stewart, Donald (Western Isles)


Mitchell, David (Basingstoke)
Renton, Rt Hon Sir D. (Hunts)
Stewart, Ian (Hitchin)


Moate, Roger
Renton, Tim (Mid-Sussex)
Stokes, John


Molyneaux, James
Rhys Williams, Sir Brandon
Stradling Thomas, J.


Monro, Hector
Ridley, Hon Nicholas
Taylor, R. (Croydon NW)


Montgomery, Fergus
Ridsdale, Julian
Taylor, Teddy (Cathcart)


Moore, John (Croydon C)
Rifkind, Malcolm
Tebbit, Norman


More, Jasper (Ludlow)
Rippon, Rt Hon Geoffrey
Temple-Morris, Peter


Morgan, Geraint
Roberts, Michael (Cardiff NW)
Thatcher, Rt Hon Margaret


Morgan-Giles, Rear-Admiral
Roberts, Wyn (Conway)
Thomas, Dafydd (Merioneth)


Morris, Michael (Northampton S)
Ross, Stephen (Isle of Wight)
Thomas, Rt Hon P. (Hendon S)


Morrison, Charles (Devizes)
Ross, William (Londonderry)
Thompson, George


Morrison, Hon Peter (Chester)
Rossi, Hugh (Hornsey)
Townsend, Cyril D.


Mudd, David
Rost, Peter (SE Derbyshire)
Tugendhat, Christopher


Neave, Airey
Royle Sir Anthony
van Straubenzee, W. R.


Nelson, Anthony
Sainsbury, Tim
Viggers, Peter


Neubert, Michael
Scott-Hopkins, James
Wainwright, Richard (Colne V)


Newton, Tony
Shaw, Giles (Pudsey)
Wakeham, John


Normanton, Tom
Shaw, Michael (Scarborough)
Walters, Dennis


Nott, John
Shelton, William (Streatham)
Warren, Kenneth


Onslow, Cranley
Shepherd, Colin
Watt, Hamish


Oppenheim, Mrs Sally
Shersby, Michael
Weatherill, Bernard


Osborn, John
Sims, Roger
Wells, John


Page, John (Harrow West)
Sinclair, Sir George
Welsh, Andrew


Page, Rt Hon R. Graham (Crosby)
Skeet, T. H. H.
Whitelaw, Rt Hon William


Paisley, Rev Ian
Smith, Cyril (Rochdale)
Wiggin, Jerry


Parkinson, Cecil
Smith, Dudley (Warwick)
Wigley, Dafydd


Pattie, Geoffrey
Speed, Keith
Wilson, Gordon (Dundee E)


Penhaligon, David
Spence, John
Winterton, Nicholas


Percival, Ian
Spicer, Jim (W Dorset)
Wood, Rt Hon Richard


Peyton, Rt Hon John
Spicer, Michael (S Worcester)
Young, Sir G. (Ealing, Acton)


Pink, R. Bonner
Sproat, Iain
Younger, Hon George


Powell, Rt Hon J. Enoch
Stainton, Keith



Raison, Timothy
Stanbrook, Ivor
TELLERS FOR THE AYES:


Rathbone, Tim
Stanley, John
Mr. W. Benyon and


Rawlinson, Rt Hon Sir Peter
Steel, David (Roxburgh)
Mr. Fred Silvester


Rees, Peter (Dover &amp; Deal)






NOES


Abse, Leo
Coleman, Donald
Flannery, Martin


Allaun, Frank
Colquhoun, Mrs Maureen
Fletcher, Raymond (Ilkeston)


Anderson, Donald
Concannon, J. D.
Fletcher, Ted (Darlington)


Archer, Peter
Conlan, Bernard
Ford, Ben


Armstrong, Ernest
Cook, Robin F. (Edin C)
Forrester, John


Ashley, Jack
Corbett, Robin
Fowler, Gerald (The Wrekin)


Ashton, Joe
Cox, Thomas (Tooting)
Freeson, Reginald


Atkins, Ronald (Preston N)
Craigen, J. M. (Maryhill)
Garrett, John (Norwich S)


Atkinson, Norman
Cronin, John
Garrett, W. E. (Wallsend)


Bagier, Gordon A. T.
Crosland, Rt Hon Anthony
Gilbert Dr John


Barnett, Guy (Greenwich)
Cryer, Bob
Ginsburg, David


Barnett, Rt Hon Joel
Cunningham, G. (Islington S)
Golding, John


Bates, Alf
Cunningham, Dr J. (Witeh)
Gould, Bryan


Benn, Rt Hon Anthony Wedgwood
Dalyell, Tam
Gourlay, Harry


Bennett, Andrew (Stockport N)
Davidson, Arthur
Graham, Ted


Bidwell, Sydney
Davies, Bryan (Enfield N)
Grocott, Bruce


Bishop, E. S.
Davies, Denzil (Llanelli)
Hamilton, James (Bothwell)


Blenkinsop, Arthur
Davies, Ifor (Gower)
Hamilton, W. W. (Central Fife)


Boardman, H.
Davis, Clinton (Hackney C)
Hamling, William


Booth, Albert
Deakins, Eric
Hardy, Peter


Boothroyd, Miss Betty
Dean, Joseph (Leeds West)
Harper, Joseph


Bottomley, Rt Hon Arthur
de Freitas, Rt Hon Sir Geoffrey
Harrison, Walter (Wakefield)


Boyden, James (Bish Auck)
Dell, Rt Hon Edmund
Hattersley, Rt Hon Roy


Bradley, Tom
Dempsey, James
Hatton, Frank


Bray, Dr Jeremy
Doig, Peter
Hayman, Mrs Helene


Brown, Hugh D. (Provan)
Dormand, J. D.
Healey, Rt Hon Denis


Brown, Robert C. (Newcastle W)
Douglas-Mann, Bruce
Heffer, Eric S.


Brown, Ronald (Hackney S)
Duffy, A. E. P.
Hooley, Frank


Buchan, Norman
Dunn, James A.
Horam, John


Butler, Mrs Joyce (Wood Green)
Dunnett, Jack
Howell, Denis (B'ham, Sm H)


Callaghan, Rt Hon J. (Cardiff SE)
Dunwoody, Mrs Gwyneth
Hoyle, Doug (Nelson)


Callaghan, Jim (Middleton &amp; P)
Eadie, Alex
Huckfield, Les


Campbell, Ian
Edelman, Maurice
Hughes, Rt Hon C. (Anglesey)


Canavan, Dennis
Edge, Geoff
Hughes, Mark (Durham)


Cant, R. B.
Edwards, Robert (Wolv SE)
Hughes, Robert (Aberdeen N)


Carmichael, Neil
Ellis, Tom (Wrexham)
Hughes, Roy (Newport)


Carson, John
English, Michael
Hunter, Adam


Carter, Ray
Evans, Ioan (Aberdare)
Irving, Rt Hon S. (Dartford)


Carter-Jones, Lewis
Evans, John (Newton)
Jackson, Colin (Brighouse)


Castle, Rt Hon Barbara
Ewing, Harry (Stirling)
Jackson Miss Margaret (Lincoln)


Clemitson, Ivor
Faulds, Andrew
Janner, Greville


Cocks, Michael (Bristol S)
Fernyhough, Rt Hon E.
Jay, Rt Hon Douglas


Cohen, Stanley
Fitt, Gerard (Belfast W)
Jeger, Mrs Lena







Jenkins, Hugh (Putney)
Moonman, Eric
Silverman, Julius


Jenkins, Rt Hon Roy (Stechford)
Morris, Alfred (Wythenshawe)
Skinner, Dennis


John Brynmor
Morris, Charles R. (Openshaw)
Small, William


Johnson, James (Hull West)
Morris, Rt Hon J. (Aberavon)
Smith, John (N Lanarkshire)


Johnson, Walter (Derby S)
Moyle, Roland
Snape, Peter


Jones, Alec (Rhondda)
Mulley, Rt Hon Frederick
Spearing, Nigel


Jones, Barry (East Flint)
Murray, Rt Hon Ronald King
Spriggs, Leslie


Jones, Dan (Burnley)
Newens, Stanley
Stallard, A. W.


Judd Frank
Noble, Mike
Stewart, Rt Hon M. (Fulham)


Kaufman, Gerald
Oakes, Gordon
Stott, Roger


Kelley Richard
Ogden, Eric
Strang, Gavin


Kerr Russell
O'Halloran, Michael
Strauss, Rt Hon G. R.


Kilroy-Silk Robert
Orbach, Maurice
Summerskill, Hon Dr Shirley


Kinnock, Neil
Orme, Rt Hon Stanley
Swain, Thomas


Lambie, David
Ovenden, John
Taylor, Mrs Ann (Bolton W)


Lamborn, Harry
Owen, Dr David
Thomas, Jeffrey (Abertillery)


Lamond, James
Padley, Walter
Thomas, Mike (Newcastle E)


Latham, Arthur (Paddington)
Palmer, Arthur
Thomas Ron (Bristol NW)


Leadbitter, Ted
Park, George
Thorne, Stan (Preston South)


Lee John
Parker, John
Tierney, Sydney


Lewis, Ron (Carlisle)
Parry, Robert
Tinn, James


Lipton, Marcus
Pavitt, Laurie
Tomlinson, John


Litterick, Tom
Pendry, Tom
Torney, Tom


Lomas, Kenneth
Perry, Ernest
Urwin, T. W.


Loyden, Eddie
Phipps, Dr Colin
Varley, Rt Hon Eric G.


Luard, Evan
Prentice, Rt Hon Reg
Wainwright, Edwin (Dearne V)


Lyon, Alexander (York)
Prescott, John
Walden, Brian (B'ham, L'dyw'd)


Lyons, Edward (Bradford W)
Price, C. (Lewisham W)
Walker, Harold (Doncaster)


McCartney, Hugh
Price, William (Rugby)
Walker, Terry (Kingswood)


McElhone, Frank
Rees, Rt Hon Merlyn (Leeds S)
Ward, Michael


MacFarquhar, Roderick
Richardson, Miss Jo
Watkins, David


McGuire, Michael (Ince)
Roberts, Albert (Normanton)
Watkinson, John


Mackenzie, Gregor
Roberts, Gwilym (Cannock)
Weitzman, David


Mackintosh, John P.
Robertson, John (Paisley)
Wellbeloved, James


Maclennan, Robert
Roderick, Caerwyn
White, Frank R. (Bury)


McMillan, Tom (Glasgow C)
Rodgers, George (Chorley)
White, James (Pollok)


McNamara, Kevin
Rodgers, William (Stockton)
Whitehead, Phillip


Madden, Max
Rooker, J. W.
Whitlock, William


Magee, Bryan
Roper, John
Willey, Rt Hon Frederick


Mahon, Simon
Rose, Paul B.
Williams, Alan (Swansea W)


Marks, Kenneth
Ross, Rt Hon W. (Kilmarnock)
Williams, Rt Hon Shirley (Hertford)


Marquand, David
Rowlands, Ted
Williams, W. T. (Warringon)


Marshall, Dr Edmund (Goole)
Ryman, John
Wilson, Alexander (Hamilton)


Marshall, Jim (Leicester S)
Sandelson, Neville
Wilson, Rt Hon H. (Huyton)


Mason, Rt Hon Roy
Sedgemore, Brian
Wilson, William (Coventry SE)


Meacher, Michael
Selby, Harry
Wise, Mrs Audrey


Mellish, Rt Hon Robert
Shaw, Arnold (Ilford South)
Woodall, Alec


Mikardo, Ian
Sheldon, Robert (Ashton-u-Lyne)
Wrigglesworth, Ian


Millan, Bruce
Shore, Rt Hon Peter
Young, David (Bolton E)


Miller, Dr M. S. (E Kilbride)
Short, Rt Hon E. (Newcastle C)



Miller, Mrs Millie (Ilford N)
Short, Mrs Renée (Wolv NE)
TELLERS FOR THE NOES:


Mitchell, R. C. (Soton, Itchen)
Silkin, Rt Hon S. C. (Dulwich)
Mr. David Stoddart and


Molloy, William
Sillars, James
Mr. John Ellis.

Question accordingly negatived.

Mr. Wm. Ross: I beg to move Amendment No. 9 in page 3, line 15, at end insert:
'where the total cost, exclusive of value-added tax, of such conversion, reconstruction, alteration or enlargement does not exceed £400'.
I understand that with this amendment we may take Amendment No. 320, in page 3, line 15, at end insert:
'save in any case where the supply of goods is at a total cost of more than £1,000'.
Amendment No. 9 is designed to meet the principal objections of the Treasury Bench, one of which appeared to be that Ministers objected to small amounts of tax being repaid. [Interruption.]

Mr. Deputy Speaker: Order. Will right hon. and hon. Members who

do not wish to listen to the moving of the amendment kindly withdraw from the Chamber quietly?

Mr. Ross: Another principal objection that has been raised concerns the policing that is necessary to ensure that there is no attempt to defraud the Revenue. With the figure of £400, only about £30 VAT is repayable. That is still worth while to the individual and it cuts out the very small amounts. The Treasury and I may have different views of what comprises a small amount, but £32 is still a week's wages, and a sum of money which many people would find extremely useful.
There was a long discussion previously on this general point. All the points that were made in respect of the earlier amendment can equally be made for


this. I see no reason why the Minister cannot accept this—to him—lesser evil, which will be a great help to the people attempting to improve their lot.
Reference has been made to the fact that the Conservative Government imposed VAT. I was not a member of the House when VAT was introduced and I should like to ask the Minister whether he raised any objection when VAT was imposed on self-builders. The impression is given that the sin lies all on one side, namely, with the Conservative Government. I wonder what efforts have been made to secure relief for those who have had to pay VAT since then. The Minister said earlier this evening that he could not accept an amendment at this stage, thereby implying that there would come a time when it would be possible to accept an amendment. If that is correct, when will that time come?

Dr. Gilbert: The hon. Member for Londonderry (Mr. Ross) has asked what efforts we made with regard to VAT on the 1972 Finance Bill. Mercifully, memory obscures what happened during the Committee proceedings on that Bill. VAT was introduced by the Conservative Government, and the first relief from it for "do-it-yourself" builders is incorporated in Clause 3. The hon. Member for Guildford (Mr. Howell), who waxed indignant because we were not being more generous, and described our dividing line as lunacy, might have acknowledged that the position after the clause has been enacted will be an improvement on the inheritance which his party left us and the British people.
The difficulty which I mentioned in the debate on the last amendment occurs again on this one. It proposes that if the cost incurred is £400 or more there shall be relief, but if it is less there will be no relief. By this method the hon. Member for Londonderry seeks to rule out the more trivial claim. That would create anomalies and incentives for people to spend more than £400 to obtain the benefit of the provision—a minimum of £32. Therefore, the cost to them as a result of the amendment would be less by having more work done.
Most of the arguments which I put forward on the last amendments which we debated apply just as forcefully to this

amendment. Since the hon. Member for Londonderry was good enough not to repeat his arguments, I hope that the House will not accuse me of discourtesy if I do not repeat my arguments. There would be problems about deciding whether materials were used for repair rather than for conversion. There would be a borderline with regard to decorations, and so on.
I must therefore advise hon. Members with regret, that this amendment is no more acceptable than the last amendment.

Rev. Ian Paisley: Does the hon. Gentleman have it in mind to introduce amending legislation on this point at a later date?

Dr. Gilbert: By the leave of the House, may I say that I make no commitment. I have said that the spirit of the amendment is in harmony with the Clause. We expect considerable difficulty even in operating the clause. The Government thought this a proper relief to make to try to move back the line of anomaly in existing legislation. If it transpires that the difficulties of policing the scheme envisaged in the clause are not as great as we expect, it may be possible to go further, but we need to give the clause time to operate and to see how it works in practice. We can then consider the matter. If it proves to be less difficult to operate than we fear, we shall certainly look again sympathetically at the situation.

Mr. Wm. Ross: The Financial Secretary said, and we all agree, that the clause is an improvement, but it is only a half-way house, and half way is neither here nor there. It is not a satisfactory position to be in.
The hon. Gentleman said that acceptance of the amendment would create anomalies. There are already anomalies which we are trying to get rid of. The Financial Secretary also said that the amendment would encourage people to spend more than £400. On £400 a person would get only £32 back. The most he could spend would be an extra £30, which would not go far.
I realise that the axe is poised and we cannot take up too much time. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4

REFUND TO DIPLOMATIC MISSIONS, ETC., OF VAT ON IMPORTATION OF HYDROCARBON OIL

9.30 p.m.

Mr. Robin Maxwell-Hyslop: I beg to move, Amendment No. 327, in page 3, line 23, after 'provisions', insert
'(but only in respect of such countries as the Secretary of State for Foreign and Commonwealth Affairs shall certify as offering reciprocal alleviation of taxation to British diplomatic and consular staff)'.

Mr. Speaker: With this we are taking Amendment No. 331, in page 3, line 31, at end insert
'but the Commissioners shall not make any payment by virtue of the words so inserted before such date as may be specified by directions of the Treasury embodied in a statutory instrument which shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament'.

Mr. Maxwell-Hyslop: This is one of the few amendments which save public money instead of spending it. The Government propose a VAT drawback for diplomatic missions. The amendment seeks to confine that tax drawback to diplomatic missions from countries which make a reciprocal concession to British diplomatic and similar bodies.
The proposal is entirely reasonable on two grounds. First, it gives other countries an incentive to provide reciprocal tax drawbacks for British missions. Secondly, it limits the value of the concession.
At a time when we suffer from a plethora of international bodies, all claiming tax exemption, exemption from rates, and so on, we should discipline our enthusiasm for giving relief by limiting it to countries which the Secretary of State for Foreign and Commonwealth Affairs certifies as offering reciprocal alleviation of taxation to British diplomatic and consular staff.
The matter needs no further elucidation; it is entirely clear. Whether it recommends itself to the Government, which should welcome an amendment which reduces public expenditure, we shall doubtless shortly hear.

Dr. Gilbert: As no one has spoken to Amendment No. 331, which stands in the name of the official Opposition, the House

will understand if I address my remarks solely to Amendment No. 327.
I assure the hon. Member for Tiverton (Mr. Maxwell-Hyslop) that the principle he puts forward is already well recognised and taken care of. He seeks to secure that relief from VAT shall be limited to countries which afford reciprocal privileges to diplomats in this country. That principle is already recognised in the two main enactments. Section 3(1) of the Diplomatic Privileges Act 1964 provides for restrictions on privileges and immunities by Order in Council in any case where a foreign country affords lesser privileges to members of a United Kingdom mission stationed there than those which are conferred by the United Kingdom on officials of that country stationed here. Section 2 of the Consular Relations Act 1968 provides similarly. On that basis the hon. Gentleman may be assured that what he seeks to provide against is already covered.

Mr. Maxwell-Hyslop: Before the hon. Gentleman sits down, can he tell us about subsection 5(b), dealing with the International Organisations Act, because international organisations seem to be multiplying even faster than sovereign States?

Dr. Gilbert: I deliberately did not refer to international organisations because it seemed to me that the hon. Gentleman's amendment did not purport to deal with that problem. As drafted, it leaves their position totally unclear. As far as I can understand, the question of reciprocity does not arise with international organisations. They do not extend any relief of this sort to us. If the hon. Gentleman has any specific examples in mind that have escaped my imagination I would be grateful to hear from him.

Mr. Maxwell-Hyslop: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5

INCOME TAX: ALTERATION OF ADDITIONAL RATES FOR 1974–75

Mr. Speaker: The next amendment is Amendment No. 298, in page 3, line 36, leave out from 'say' to 'except' in line 42 and insert:
'(b) in respect of so much of the investment income (other than estate income, income aris-p

ing from a purchased annuity within the meaning of section 285 of the Taxes Act 1970 and a share in partnership income) included in an individual's total income as exceeds £1,000 at the additional rate of 10 per cent. for the first £1,000 of the excess and 15 per cent. for the remainder;'.

Mr. David Howell: Not moved, under protest.

Mr. Speaker: The next amendment is Amendment No. 346, in page 3, line 37, at beginning insert:
'where an individual's total income exceeds £3,000,'.

Mr. David Howell: Not moved, under protest.

Mr. Speaker: The next Amendment is Amendment No. 349.

Mr. David Howell: On a point of order, Mr. Speaker. I wonder if, before this amendment is moved, I may ask whether it would be for the convenience of yourself and the House if we were to take with it the remaining amendments to Clause 5 which you have selected? This would enable us, in the limited time we have left, to have a full and proper debate on the important issues that are raised. There are many kinds of people, such as the disabled and widows, who are affected. I would also suggest that, if possible, we have a separate vote on Amendment No. 349 and Amendment No. 16.

Mr. Speaker: If that is agreeable to the House I am willing to have the amendments taken together and to have a separate vote on the two amendments referred to.

Mr. A. J. Beith: Further to that point of order, Mr. Speaker. With respect to your selection, some embarrassment and difficulty is caused to some of us by the absence of Amendment No. 15 from your selection. I hope that you will be indulgent and allow those of us who are worried about certain specific superannuation schemes, particularly FSSU and FSSNU, to deal with these matters in the general discussion on Clause 5.

Mr. Speaker: The general discussion can include that point.

Mr. Nigel Lawson: I beg to move Amendment No. 349, in page 3, line 39, leave out '10' and insert '5'.
I understand that with this amendment we are also discussing Amendment No. 16, in page 4, line 1, after 'more', insert:
'or was in receipt of an invalidity pension or unemployed and in receipt of an attendance allowance'.
With Amendment No. 349 there should logically go an amendment which may not have appeared on the Order Paper and which is consequential. It reads:
page 4, line 2, leave out '10' and insert '5'.
Like the Financial Secretary just before the last Division, I, too, am glad that we have now come back to the relative calm of proceedings of the Finance Bill.
This amendment concerns an old story. Unlike many old stories, it does not improve in the telling. It goes back to the last Finance Bill introduced by the Government in the last Parliament. Then the Chancellor decided to change the point at which the investment income surcharge came into effect, so that instead of coming into effect on investment incomes of £2,000 a year and above it came into effect on investment incomes of £1,000 a year and above for most people, or £15,000 and above for those over 65 years of age. This was an increase in tax upon those people with savings incomes between £1,000 and £2,000 a year.
The purpose of this amendment is to achieve some kind of compromise and put a surcharge not at the 10 per cent. rate which the Chancellor suggested in the Budget but at a rate of 5 per cent. We are talking about the financial year which is now almost over. One reason why the story does not improve in the telling is that the Chancellor of the Exchequer, having made this proposal in the last Parliament, had the experience of its being rejected by the House. That having happened by a majority of 16, he returned in the present Finance Bill and said that he would put back the increase in investment income surcharge for those with small investment incomes to what he had intended the figure to be—in other words, retrospectively for the whole of the year 1974–75. Therefore, in this Bill we are being asked—in the eleventh month of that financial year—retrospectively to put up the investment income surcharge on those with small investment incomes.
This is a disgraceful example of retrospective legislation—and there is no doubt


that it is retrospective. The Chief Secretary in trying to defend the provision in Committee attempted to suggest that there was a precedent. That does not make things right, but he said that that was so. He quoted the action of the Conservative Government in December 1973 who announced a surtax surcharge which, had that Government remained in office, would have had a retrospective effect. I hold no brief for that retrospective legislation any more than I do for any other retrospective tax legislation, but the difference is very considerable. The difference is that the previous provision did not reject retrospectively a decision of the House. The present legislation is retrospective for 1974–75, but is intended to continue in future years, whereas the previous legislation was for one year only. Therefore, the precedent which was quoted was not a good one and was certainly not valid in terms of the retrospective legislation that we are being asked to enact tonight.
The Chancellor of the Exchequer and the Chief Secretary have from time to time attempted to justify this vicious attack on those with small investment incomes. Let us remember that we are talking of people with savings which may amount to £20 a week and upwards. That is not a large income. There are many of my constituents who cannot understand why, having saved all their lives out of taxed income, they should now be expected to pay any surcharge at all on an investment which is less than half the national average wage. However, this is what they are being told they must do by the Government.
The Chancellor and the Chief Secretary have advanced various reasons why this should be done. I am glad to see that the Chief Secretary has now come into the Chamber and is about to take part for a little while in our debate. I know how much he enjoyed our debates upstairs, and I hope that, having acquired the taste, he will stay in the House longer tonight and on subsequent evenings. Government spokesmen have said that a large part of the money will go to those with investment incomes of over £3,000 a year. My goodness, what a tremendous income and how dreadful for anybody to earn over £3,000!

The fact of the matter, as I established in a Written Answer recently, is that the Chancellor's view is that of those with investment incomes of over £1,000 a year who come into the taxable bracket, 75 per cent. have incomes below £3,000 a year. Indeed, 50 per cent. of the total taxpayers with investment incomes of over £1,000 come into the £1,000 to £2,000 a year bracket. Therefore, the great majority of people whom we are trying to help in the amendment are people with investment incomes—savings—of between £1,000 or £2,000 a year. By any stretch of the imagination, those people are not rich.
9.45 p.m.
A further point was established as a result of the Written Answer given by the Chancellor of the Exchequer. We hear the Labour Party and Government supporters going on about the evils of investment income and savings income. However, 85 per cent. of the taxpayers have such incomes of less than £1,000 a year. Those people have saved because they hoped their incomes would increase beyond £1,000 a year, which is not very much in these times. Those people are being deliberately discriminated against by the Chancellor of the Exchequer, and we seek relief for them by means of this amendment.
A further reason has been given by the Government. However, I interpolate to say that the real reason is pique, because Parliament has undone what the Chancellor of the Exchequer provided in his first Budget this year. The Government are determined to put back that provision, because they cannot stand for Parliament asserting its sovereignty in any context. That is the reason for this rigid guillotine motion, which is curtailing our debates.

Mr. James Dempsey: I was very interested in the point made by the hon. Gentleman about investment incomes which he estimated at £1,000. Can he say how much capital a person needs to receive that income?

Mr. Lawson: I am happy to answer the hon. Gentleman. I estimate that a capital investment in War Loan of £6,150 is sufficient to produce that income. That is not a large sum of money.
Other reasons have been given for this piece of vicious legislation. We were told that the cost was great and that a large amount of money would have to be borrowed, since the total of the investment income surcharge on these people was £40 million. However, a 50 per cent. charge as a compromise could apply to people receiving between £1,000 and £2,000. That cost would be £20 million, which is not a large sum of money by the standards of national budgeting of the Government. We can find £10 million straight away by not giving the handout to the trade unions, which is provided for under another clause. In addition, £10 million is less than one-third of the annual cost of the tea subsidy, let alone other food subsidies. My constituents are far more concerned about the surcharge they will have to pay on their small savings and small investment incomes than they are about a negligible change in the price of a quarter-pound packet of tea. The Government's priorities are wrong, even if they are concerned to help the people they profess to wish to assist.
When speaking about sums of £20 million, it is monstrous that the borrowing requirement should be flung in our face, since the borrowing requirement is not £20 million, £200 million, or £2,000 million. Officially the borrowing requirement was £6,300 million. It is now running at about £7,500 million. In the coming financial year, if nothing is done, the borrowing requirement will be £9,000 million. The recently published White Paper on public expenditure shows vast expenditures so far beyond what the country can bear that to talk about not being able to afford £20 million is utterly indecent and, to use a word much favoured by Government supporters, obscene.
Finally, the Government have said that it is an essential part of the social contract. Right hon. and hon. Members may well ask "What social contract?" Like Pilate, they will not receive an answer. But many Opposition Members are beginning to believe that the social contract, so far from doing little good, is doing positive harm. If the sort of things that the Government have produced to carry out their side of the contract are things like this, whereas the trade unions on their side do not carry out their side,

the existence of the social contract is positively harmful, far from being useful.
We have to say that the social contract, the borrowing requirement and all the other arguments put forward by the Government do not hold water. This is a vindictive and petty piece of spite designed to stoke up the furnaces of envy which lurk in many people's hearts. It is designed, too, like many other measures, to deter saving, to deter independence, to deter self-reliance and self-respect among the people of this country.
I hope that the Government at this late stage will decide to abandon this retrospective piece of legislation or, if they do not feel that they can do that, at least accept the half-measure or compromise—it does not go far enough to satisfy me—which is put forward in the amendment.

Mr. Beith: After the rather wider discourse by the hon. Member for Blaby (Mr. Lawson) on the impact of the investment income surcharge, I hope that I may be allowed to concentrate the Government's mind on one of its specific impacts. In doing so, I have to declare an interest in the federated superannuation scheme for universities. I wish to draw attention to the impact of the surcharge on members of that scheme and of others like it, including the federated superannuation scheme for nurses.
Both are dying schemes, in that one is to be replaced by a new university salaries scheme and the other has already been replaced. However, there are and will remain beneficiaries for many years to come who will be affected by the surcharge and who would benefit from this amendment being made.
It should be made clear that the schemes in all respects are like any other pension scheme, except that they involve insurance policies which mature in the form of lump sums which are then used to purchase annuities. The member pays ordinary pension contributions in the same way as anyone else, but, at the end, he acquires a lump sum and secures his pension by investing it in an annuity. Such people have not accumulated capital, acquired windfall sums or made additional savings over and above their pensions. We are talking about normal pension provisions. Nor are they in retirement and in receipt of other income. They are in


the position of anyone taking part in a superannuation scheme, with the difference that they acquire lump sums which they invest to purchase annuities.
Between the ages of 60 and 65 these people will be affected by investment income of over £1,000. Those over 65 will be affected by the over-£1,500 level. We are dealing with the normal salaries of some of those concerned. If we take the lecturer salary range of between £3,000 and £4,000, someone expecting half pay on that will immediately feel the impact of the investment income surcharge on his retirement income. Alongside him in retirement will be people who for one reason or another have been able to transfer to other pension schemes like the new university superannuation schemes. There will be people who have been superannuated in other ways. The scientist in a research laboratory will find alongside him in retirement people who have been superannuated on a Civil Service basis, and their pensions will not be affected by the surcharge in the way that his is.
When this matter was raised in Committee, it was in the context of an amendment which went very much wider than these specific cases. My right hon. and hon. Friends tabled Amendment No. 15, which was designed specifically to deal with this one. It would have been possible for the Government to act in a number of ways to deal with the problem. They could have accepted the amendment moved by the hon. Member for Kingston-upon-Thames (Mr. Lamont) which went somewhat wider. I could have understood the Government's doing that rather than making concessions over the whole of the investment income surcharge, because we are talking about a specific group and not the whole range of people affected by the surcharge. If the Government were not happy about the wide range covered by the amendment tabled by the hon. Member for Kingston-upon-Thames, they could have taken the narrower version which we suggested and moved it themselves.
It is disturbing to those who have to consider these groups of people that, even in the concluding speech in Committee, when this matter was discussed, there was no specific reference to their problems,

except those between the ages of 60 and 65. It seems that throughout our discussions this, I am sure, unintended effect on a particular group of pensioners has been allowed to continue. I suggest that Ministers must look more closely at the situation. I cannot imagine that they intended to create a situation in which groups of pensioners from universities and nursing—there are others—will be disadvantaged because their pensions are nominally from investment income which is not paid to them in the way that conventional superannuation schemes operate.
These schemes were devised to be flexible for the person who changed his employment for a normal superannuation scheme. They were based on insurance policies, so that a man working in a university could readily move into Civil Service employment, a research department or industry, and maintain some pension rights in a situation even less favourable than the present regarding transferability of pensions. It was no part of the understanding of those who joined these schemes that when they retired they would be affected by an investment income surcharge which was designed for different purposes and was never intended to penalise their pensions.
I am sure that hon. Members who have become familiar with the details of these categories of people will realise that the investment income surcharge was not intended to deal with them in the way that it does and will be surprised that the Government have not made greater efforts to exempt them from the provisions of the charge.

Mr. John Tomlinson: I hope that my right hon. and hon. Friends will not be beguiled by the glib superficiality of some of the arguments put forward by the hon. Member for Blaby (Mr. Lawson). We should examine in detail some of the assertions made by the hon. Gentleman in his contribution to the debate on investment income surcharge.
First, when questioned by my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) about the amount of capital required to get an investment income of £1,000, the hon. Gentleman glibly trotted out the prepared figure of £6,150. That figure is correct only if we


assume that people bought War Loan at the bottom of the market. But such is the confidence which has recently been restored to the market that it would cost over £7,000 today to purchase War Loan to get the equivalent income. It does not serve the argument well to take the bottom of the market when we have already passed it. It is typical of the superficially of the argument that we heard from the hon. Gentleman.

Mr. David Mitchell: Will the hon. Gentleman give way?

Mr. Tomlinson: No. The hon. Gentleman can come in later. There is plenty of time up to 12 o'clock.
As somebody who has, on a number of occasions in this House, expressed concern about the increase in the public borrowing requirement—a concern which I know is shared by the hon. Member for Blaby—I do not think that it serves his argument well to suggest that because the public borrowing requirement is already high a further £20 million is nothing to be concerned about. Therefore, to argue that we can afford an extra £20 million is a distortion of the serious argument that lies beneath it.

Mr. Lawson: I am sure that the hon. Gentleman will not forget that I specifically pointed out that this matter could be financed by savings that could be made elsewhere in public expenditure. Therefore, there would be no increase in the borrowing requirement.

10.0 p.m.

Mr. Tomlinson: One of the arguments put forward by the hon. Member for Blaby on how savings could be made would be in contradiction of the expressed wishes of this House. That is in relation to the £10 million fund, on which this House has already clearly expressed the view that it should be returned to the trade unions. It is not adequate to propose that savings should be found from areas on which this House has already taken a decision. What is really suggested is that we should find fictitious savings that are not clearly available to the Government. To argue that an extra £20 million on top of the existing public borrowing requirement is something that we can afford is an act of irresponsibility in the current economic climate, and I am sure it is an argument which my right

hon. and hon. Friends will not be prepared to accept.
The level of argument becomes somewhat worse when Opposition Members say that the social contract is positively harmful. I would have thought that at this time, above all else, if we are to come to grips with the serious problems of inflation we have to make the social contract work. Different people are putting different emphases on what needs to be done to make it work, but to allege that the social contract is positively harmful, without offering a single positive suggestion about what needs to be done to make it work, is an act of gross irresponsibility. At the moment that is the only bulwark this society has against two possible alternatives—mass unemployment and a return to the kind of statutory incomes policy that led the previous Government to the verge of economic chaos. We cannot, therefore, accept that kind of nonsense in a debate on investment income surcharge.
I am sure that you, Mr. Speaker, like the rest of us, will have been somewhat bemused by the hon. Gentleman's comments about the need for us to concede his amendment on investment income surcharge if we are not to lose our self-reliance and self-respect. I am sure that every hon. Member on the Government side of the House goes to his constituency every weekend full of self-respect and particularly pleased, in that self-respect, with the actions taken by the Government in the present Finance Bill. I hope my right hon. Friends will reject the proposals put forward.

Mr. John Hannam: I shall not follow the line taken by the hon. Member for Meriden (Mr. Tomlinson) as I wish to speak particularly to Amendment No. 16 in my name and that of other hon. Members on both sides of the House. It deals specifically with the disabled and seeks to rectify what appears, and can only appear, to be an unintentional mistake on the part of the Government in omitting the disabled from the exemptions to this infamous surcharge on investment income. The effects of inflation are harsh enough on all normally fit people but the disabled person suffers even more, because he or she is generally more likely to be unemployed, is certainly facing disproportionately higher


living costs than the average person and does not benefit from the abnormally high increases in income accruing to organised workers.
The costs of medicines, heating, travel, special aids and equipment and special clothes place an unfair burden upon our severely disabled people. If this surcharge is allowed to bear down on them, all the improvements which, over the last two years, this House and Government and previous Governments have produced for the disabled, will be undone. As the Chairman of the Child Poverty Action Group said recently:
Many disabled people are suffering real hardship. What the Government has offered in October amounts to 34p a week for each of Britain's disabled people. Many of them are living on fixed incomes.
From my work, together with hon. Members on both sides of this House on the All-Party Disablement Group, I can verify the serious effects that inflation is having on our disabled people. I had hoped, last night, to introduce amendments seeking to relieve disabled drivers of the VAT charge on fuel, but my amendment was not selected, despite the all-party signatories to it. But in regard to that alone, motoring costs have risen by 80 per cent. since 1972, and the costs of other vital necessities for disabled people have risen even faster, so that there is a crisis situation in the field of disablement.
We all know that the Minister for the Disabled is doing his best to help, but what can he do if he is stabbed in the back by the Treasury bringing forward such measures as this surcharge on low levels of investment income on which so many disabled people depend?
I should like to quote briefly from a letter from a 37-year-old polio victim:
My wife and I live on investment income which is derived from rents received from 22 lock-up garages and two unfurnished flats. This is the only method I have within my powers to provide my wife and I with an income. We think it is very unfair that disabled people should have their pockets picked by government who refer to our type of income as 'unearned' and therefore we have to pay their tax surcharge on an amount as low as £19.24 a week. There is no need to wonder what the reaction would be from the general public if they were told they had to pay 43 per cent. tax on everything they received over £19.23 per week.
I could give many more examples, but I think that the House understands the problem.
Amendment No. 16, which also has come from the pen of Peter Large of the Disablement Income Group, asks the Government to choose one definition of unemployed disabled people who are forcibly retired because of disability. As it points out, the financial needs of people retired as a result of disability are not less than those of people retired as a result of age. Indeed, the financial needs of retired disabled people are greater in that they incur additional expense because of disability. For this reason, can the Government really condone disabled people being treated less favourably than non-disabled people aged 65 or over, particularly as the latter could still be working?
I hope that the Minister will accept Amendment No. 16, which is supported by hon. Members from both sides. The cost cannot be overwhelming to the Treasury, but if we have to vote and the Government once again, as on the disabled housewife's benefit under the Social Security Benefits Bill, try to fudge the issue, the disabled of this country will judge them accordingly.

Mr. David Mitchell: The amendment would reduce the surcharge on "unearned", as it is called, income—an odd phrase to use considering the circumstances in which people have built up the money. I have two points to make. The first relates to who is hit by the surcharge as it stands and the second is the question whether it is desirable that it should apply and that people should be discouraged.
The hon. Member for Meridan (Mr. Tomlinson) said that because the House had already passed the provision to give £10 million to certain trade unions—generally the more millitant ones—it was not relevant to this discussion as a means of saving money and making it available for this purpose. I find it a very odd priority to give £10 million to the unions and to refuse this amendment to help the disabled.

Mr. Dennis Canavan: Does the hon. Gentleman not realise that that £10 million came from the provident funds of the trade unions and was money intended to be used to help the sick, the unemployed and widows?

Mr. Mitchell: If the hon. Member investigates the matter, he will find that there is very little truth in what he has just said.

Mr. Lawson: Is my hon. Friend not also aware that the hon. Member for Meridan (Mr. Tomlinson) is in error, no doubt inadvertently, that this provision has not been passed and will not be passed until this Bill is on the statute book?

Mr. Mitchell: I am grateful to my hon. Friend. My point is still valid, that there is a question of priorities. Who has the higher priority—the disabled, whom I intend to talk about, or the trade unions, who are not exactly skint?
This provision clobbers widows. I have had correspondence from a number of widows who have relied on what I suppose is unearned income—money left to them by their husbands to keep themselves and their children. These people are in a parculiarly vulnerable position because at a time of great inflation they have the cost of maintaining a house and raising children without having a wage-earner in the family. I should have thought that they

were a group which even the hon. Member for Meridan would regard as being more important than the £10 million for the trade unions.
Then there are the self-employed—people who do not have a superannuation scheme and who have saved throughout their working lives. Because they have saved and been self-reliant, because they have sought to look after their own old age instead of relying upon the State to rescue them, these people, too, are surcharged on their income.
Then there is the small businessman. In many cases he, throughout his working life, has sought to build up a business. Any available cash that he has had has not gone in a pension fund but has gone into the business to make it grow. When he comes to retirement age he may sell that business. It is then his hard work in building up that business which has created the capital which the Government now propose to tax by a surcharge at this additional and unreasonable rate.
The question one asks is this: is it desirable? I suggest that it is undesirable for two principal reasons. It is undesirable because we ought to be seeking to encourage the self-reliant and to encourage people to save, for as you, Mr. Speaker, will recall from your own long experience in the financial field, there is no capital other than from savings. Therefore, we should be seeking to encourage savings so that we can have the wherewithal to re-equip and modernise British industry. The one thing about which all the economists agree is the desperate shortage of capital. Yet here we are being asked to pass legislation which clobbers those who have created capital and dispels any encouragement to others to save and to create capital.
My second point on this subject is this. Hon. Members on the Government side of the House are rightly concerned about the problem of trade unionists who do not have wages as high as they would like them to have, or as high as we should like them to have, or as high as wages in Europe and other advanced industrial areas. One asks what is the difference between us and those other areas. It is not that


our workers do not work as hard. The difference lies in the fact that they have more capital behind each worker than we have.
Therefore, from the workers' point of view we should be seeking to encourage the creation of capital. Yet the present Government propose to surcharge those who create capital and to make it not worth while to do so. By discouraging savings and thrift and those who build up businesses and create capital to put behind the workers, the Government are doing a grave disservice to workers, to managements and to the economy as a whole.

Mr. Jack Ashley: I should like to revert to Amendment No. 16, in which we find an attempt to include disabled people in the same group of concessions as is carefully and calculatedly provided for by the Treasury Bench. It seems to me that it is difficult to draw any clear distinction between the needs of old people and the needs of disabled people. What Amendment No. 16 says, in effect, is that if the Government are as aware as they appear to be of the fundamental problems and dilemmas of old people, who are often classed as second-class citizens, the Government should equally be aware of the problems of disabled people, who, unfortunately, are too often classed as third-rate citizens. I find it very difficult to distinguish between the two, and I should have thought that by any standards the Government ought to include the one with the other.
Where, therefore, does the House stand on this crucial issue? I believe that the major problem is to draw this matter to the attention of the House and the public at large. That is the main issue before the House tonight.
10.15 p.m.
I hope that the Opposition will not force this issue to a vote. Equally, I hope that the Government will say to the Opposition, and to many of my hon. Friends who are much disturbed about this matter, that something worth while will be forthcoming. If that is not so my hon. Friends and I will not be able to support the Government. I am assuming, given the profoundly difficult

problems that we face, that the Government will be able to meet us half way. We are making a reasonable request. Are the Government able to say that they understand the difficulties of disabled people and that they are not prepared to leave them out in the cold? They are not spies or saboteurs but ordinary people suffering from a disability. It is entirely wrong that a disability should result in an added financial burden.
I shall listen carefully to my hon. Friend's reply. I know that he is anxious to help, and I am anxious to help him. The last thing I want is for this issue to result in party political conflict. As chairman of the all-party group on disablement, I have found no acrimony on the problem of disablement. I enjoy scoring points off the Opposition, as they enjoy doing so off me and my colleagues, on every issue except disablement. If the Government can offer us some concession they will find us supporting them. If they cannot do so, I regret that we shall not be able to support them.

Sir John Hall: The House will have been moved by the appeal of the hon. Member for Stoke-on-Trent, South (Mr. Ashley) to his own Front Bench, and by the plea of my hon. Friend the Member for Exeter (Mr. Hannam). I am afraid that I must disappoint my hon. Friend. He said that the disabled had been excluded from this clause by accident. I am afraid that it was no accident. I moved an amendment in Committee on the Floor of the House that was designed to give a small concession to the disabled and to the registered blind. Although it was received with sympathy, the Chief Secretary said that the proper way of dealing with such matters was through the social services. I suggest that social service allowances for the disabled, whether they are registered under the Chronically Sick and disabled Persons Act or whether they are registered blind persons, do little more than maintain the living standard of the individual concerned. They do little more than maintain the value of allowances as originally granted.
When we think of the problems which face the disabled, to which the hon. Member for Stoke-on-Trent, South has drawn attention, it seems extraordinary


that the Government should introduce legislation which imposes a separate surcharge on people with comparatively limited incomes. How do I explain to my disabled constituents who come to me for advice that, whereas it is possible for a man to earn £4,000 a year as a miner, for example—in fact, dockers and bummarees are getting that as well—they cannot enjoy an annual income of £1,000 or a little more without incurring an additional surcharge?
I put to the House a personal example of a man and his wife who came to see me only last Thursday. The man had met with a serious accident and was almost completely disabled. He was still able to do about half a day's work occasionally during the week. He came to me to see if I could help him get a petrol allowance as without a car he could not go out and do half a day's work. He was not able to get that allowance because he had an income from the compensation that was made payable to him. He received compensation of some £19,000. He and his wife had invested that sum following advice and they had an investment income of a little over £1,000 a year. He is now liable to pay a surcharge. How can I explain to him that an able-bodied man can earn three or four times as much and not have to pay the surcharge? Nevertheless, as a disabled man with a dependent wife, with an income derived from compensation rightly and properly awarded to him, he has to pay a surcharge.
The amendments make several modest suggestions for overcoming the problems. We ask only that disabled persons and the registered blind should be treated on the same basis as people aged 65 and over. The Chief Secretary knows that the cost would be comparatively small and that it is difficult to tell how many disabled persons are involved. The last time we debated this question he agreed that it was not likely that a large number of people would be involved.
I know that the Chief Secretary and, indeed, the whole Front Bench have sympathy with us. I know, too, that they dislike introducing exceptions for any special category. However, surely the disabled must come before anyone else. I am certain that if the Government applied their minds to it they could

accept one or other of the amendments, which would give the relief we want.
I am certain that the Government do not want it to be believed in the country that they are prepared to see the incomes of workers of all categories rise year by year and more than keep pace with the cost of living while they impose an extra penalty on those who have no opportunity of increasing their earnings and depend on compensation and on social service allowances which are increased in arrear merely to keep pace with the increased cost of living.
I beg Ministers to give careful consideration to the pleas which have been advanced by my hon. Friends and by the hon. Member for Stoke-on-Trent, South, who speaks from great experience in these matters, who knows precisely what he is talking about, and who has personal experience of the type of cases we seek to help. I therefore hope that the Government will give sympathetic consideration to this matter and will express their intention of finding a way of meeting the amendments.

Mr. Lewis Carter-Jones: I do not think that hon. Members care much which one of Amendments Nos. 16, 17 and 18 the Government are prepared to accept. I think the Government should accept Amendment No. 16.
The argument is based on the fact that the Government have identified a target area of need. They have recognised that amongst the elderly there is a group which is in need of special consideration. The Bill recognises the needs of the pensioner and there is a disregard of £500 of the excess above £1,000.
The Government having recognised this need, my hon. Friends and I ask the Government Front Bench to recognise the needs of the disabled. The disabled are at as great a risk as any other group. The cost of making this concession would be small. As my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) said, it may well be that the amendment is not drawn as tightly as the Government would like. Nevertheless, the intention is clear.
A person would qualify for the allowance, first, if he were in receipt of an invalidity pension. To qualify for such a pension it is necessary to go through


quite a rigmarole. A person would qualify, secondly, if he were
unemployed and in receipt of an attendance allowance".
Hon. Members on both sides will be well aware of the difficulties of obtaining the attendance allowance.
Amendment No. 16 would tie the exceptions to those in receipt of invalidity pension or the attendance allowance. This should not present administrative problems and would not involve great cost. It would bring to a group of people in need a very welcome relief. I hope that the Government will accept the amendment.

Mr. Patrick Mayhew: I should like to echo the sentiments which have been expressed so far by the hon. Member for Stoke on Trent, South (Mr. Ashley), my hon. Friend the Member for Wycombe (Sir J. Hall) and others of my hon. Friends, and to put flesh and blood on to the arguments they advanced. I understand that the principle behind the surcharge on investment income is that those who have such an income have broader backs. The members of the class that we are speaking about tonight have backs that are not broad but are broken. I can illustrate what I mean by three examples which show how unfair is the Government's intransigence on this matter.
The first example is of someone who has been injured in an accident but had the foresight to insure against future loss of earnings. That person, now disabled from earning his living, hopes to be able to live on the proceeds of a lump sum paid by the insurance company. His back is not broad in this case. He is seeking to replace earnings that his disability now prevents him from collecting, and he is now to be charged an extra tax over and above what he would pay if he still went out to work. Where is the justice in that?
The second category covers accidents at work. Anyone suffering such an accident can recover damages if he can show that the accident was wholly or partly the fault of his employer. He will receive a lump sum which he will invest, and he will hope to live upon the proceeds of that investment. Where is the justice in his having to pay more in taxation when

he is unable to earn his living like his more fortunate work mates who were not injured? Why should such a man pay more tax? I do not seek to make a party point, still less to make one which cannot be sustained. Governments from both sides of the House have supported the principle of the investment surcharge, making no exemption for those injured at work. I hope the Government will say whether they think it is just that those workmen and their families whose damages are calculated in this way, and who are caught by the low figure at which the surcharge now comes into operation should from now on have to pay more in tax.
Thirdly, is it right that the widow who is living on the proceeds of a successful claim under the fatal accidents legislation should from now on pay a greater sum in tax than had been thought to be the case when her husband's damages were fixed by he courts? Labour Members have asked us to say how we would strengthen the social contract. One way would be by making, for example, Amendment No. 18, so that widows of those killed at work shall not be required to pay the extra tax required by the clause. I would have thought that that was not only a sensible strengthening of the social contract but also common justice.
I hope that the Government will listen to the arguments from both sides of the House in favour at least of this relatively small class of people amongst those living on investment incomes. Their backs are not broad. They need help with the burdens which are already far too great for them.

10.30 p.m.

Mr. Tony Newton: I support the arguments of my right hon. and hon. Friends on this group of amendments.
I do not want to speak at great length, partly because we have had endless debates on the subject. If it was not apparent by last June or July that the Government would pay little attention to our arguments, it has become apparent from their behaviour now that they have a majority and are in a position to do exactly what they wish.
The arguments which have been deployed time and again about the increased


surcharge become more valid, not less, each time they are raised. The more I hear Labour Members arguing that they are attacking the wealthy by attacking people with modest investment incomes of £1,000 or £2,000 a year, many of whom may not have much other income, the less convinced I am, and the less satisfactory I find their position.
I want to say something about the position of retired taxpayers. Regardless of all the arguments about the surcharge as a whole, one of the meanest-minded and nastiest actions of the Government was to increase the taxation of the savings income of retired people. That is a feature of the Bill. There cannot be an hon. Member on either side of the House who does not have coming to him a steady stream of elderly people who do not know how they will make ends meet. Almost every Government announcement, almost every post, brings them a higher bill for electricity, petrol, coal, television licence, telephone, rates, water rates, sewerage rates and postage.

Mr. Tomlinson: Does the hon. Gentleman agree that a motor car, television and telephone are all the classic symptoms of poverty?

Mr. Newton: The hon. Member for Meridan (Mr. Tomlinson), for whom in the ordinary course of events I have a good deal of respect, has done himself considerably less than justice throughout today. If he cannot see the fallacy and absurdity of the argument he has just advanced, I doubt whether I shall be able to enlighten him in the few minutes available.
The hon. Gentleman is one of the few Labour Members with any knowledge of, or concern for, the more rural areas. He knows perfectly well that anyone aged 60 or more without a telephone and without a car in parts of the area he represents, and certainly many of the villages I represent, is cut off, isolated, stranded. We rightly hear it said on both sides of the House that more and more elderly people should be able to have a telephone. I agree. It is hypocritical now to argue that because a person has the telephone he or she deserves no consideration under the tax system. It is a patently ridiculous argument. No doubt we shall have an unsympathetic reply from the Govern-

ment, as we have had throughout the past year.
I also support the points made by my hon. Friend the Member for Basingstoke (Mr. Mitchell) about the whole attitude of Labour Members to the question of capital and investment or savings income. At Question Time today the Prime Minister tried to make the best he could of the investment intentions figures. Hon. Members on both sides of the House have expressed great concern about the level of investment, the threat to employment and the need for expanded spending on capital equipment. Where is the money supposed to come from if people will not save?
Up to a point and over a period one can do what hon. Members opposite have always tried to do in government—to make up for the drop in private savings by increasing taxation. But sooner or later even those whose interests they claim to care about—for example the average worker in the car industry—will revolt at the taxation increases, the forced savings, required to make up the gap. It is increasingly becoming nonsense to hear hon. Members opposite, from the top of the Cabinet down to everyone on the Government back benches, demanding action against unemployment and action to increase capital investment, with, at the same time, the Government introducing Bill after Bill to clobber those who save and help to provide the capital which can be invested and to clobber profits out of which equipment is provided.
In the light of almost every economic speech made by hon. Members opposite in the past few months, there are large parts of the Bill—this is one of them—which are total and complete nonsense. I was told shortly after Christmas that large department stores could not believe the amount of money being spent at their sales. Somebody said that it was as if money was going out of fashion. Under the impact of the Government's policies, it is going out of fashion. I was recently at an antiques auction sale where people could not believe the prices being realised for quite indifferent pieces of furniture. The reason is partly the problem of inflation and that people want to put their money into articles which they think will retain their value.
I do not lay the whole blame for this situation on hon. Members opposite, but


people who come to see me say "What is the point of saving when all that happens is that the Government penalise us for doing so?" That is an argument which hon. Members opposite would accept regarding the so-called—[Interruption.] If the hon. Member for Meriden wishes to interrupt, I wish he would stand up and not simply mutter.

Mr. Tomlinson: I was observing that the present level of investment in building societies conflicted with the point about savings made by the hon. Gentleman.

Mr. Newton: A large number of people have decided that there is little point in saving, except on a short-term basis, which is the kind of money which tends to go into building societies. It is much the same argument as we often hear, rightly, about the so-called disregards under the social security schemes. Hon. Members opposite would accept it in that context. People say "What is the point of my saving if my benefits are reduced?"—which is another form of taxation.
These amendments are not extravagant. It could be argued that they are very modest. Compared with the level of relief from the investment income surcharge which existed when the previous Government introduced the £2,000 relief, we should be moving to increase the relief to about £2,500 simply to take account of the past year's inflation. We are proposing far more modest amendments simply to try to rescue something of the loss the Government are imposing on this group of people.
My specific points concern Amendments Nos. 341 and 344, which relate to the treatment of women under the Government's proposals. It will not come as a surprise to Ministers to know that in their proposals the relief from the extra surcharge granted to elderly taxpayers applies where an individual's age, or that of his wife living with him, is 65 or more. Plainly this proposal is designed to help the retired taxpayer. I cannot understand the justice of a proposal which fails to acknowledge that the retirement age for women is 60. The purpose of Amendment No. 344 is to allow a single woman to enjoy the benefit of this relief from the age of 60 and not 65. Amendment No. 341 would allow a married

couple to enjoy the benefit of the relief when the wife reached the age of 60.
The point was touched on during Committee proceedings on the Floor of the House. In what was perhaps his weakest reply the Financial Secretary referred to a recommendation of the Royal Commission on Taxation, which, from memory, reported in 1954. Much water has passed under the bridge since then. It is thoroughly unsatisfactory for the hon. Gentleman to rely on a single sentence dismissing the whole problem of treating married women as retired at the age of 60. It cannot be right that we should treat women, particularly single women, in this way. I hope that we shall have a specific and detailed reply on this point.

Mrs. Lynda Chalker: I wish to refer to Amendments Nos. 16, 17 and 18. The first of this group is probably the most appropriate in terms of the disabled. It is a small concession to ask of the Government, who can hand out money for other things quite liberally. It asks only for an additional disregard for the disabled. I am concerned with people who have a limited amount of investment income and no other income but need increasing amounts of equipment to reach some bearable level of living in their later years.
Today we see many parents trying, hard though it may be, to set aside savings for a mongol child and many other categories of children who will never be able to earn a living and keep themselves in the way that the rest of us wish they could. We know that the Government recognise such problems in a better fashion than before; for example, hypothermia in old people. They are prepared to grant concessions for people aged over 65.
It seems strange that the Government are not prepared to grant this concession for people who have no hope of earning their own living and often have only what is left to them by relatives, or have to fall back on the State. I know of three cases of people suffering from progressive illnesses. At present they can still earn their living. In one case, after perhaps five years, that person will not be able to go out to work. In the other cases it will be about nine years or perhaps 15 years. By hook or by crook they are trying to save every penny they


can and invest it so that they will not have to rely on the State in future. They are trying to invest wisely as a hedge against inflation, if that is possible today.
It is surely right to help these people so that they may buy further equipment with the money they do not pay in additional taxation. When we cannot always give them individual funds this is a way of helping them to provide for themselves.

10.45 p.m.

Mr. Ian Gow: I support Amendments No. 349 and No. 356. I wish first to deal with the crucial matter of retrospective legislation.
On 31st July last the Finance Act 1974 received the Royal Assent. Section 7(1)(b) provided for the rate of tax which would apply to what was therein described as "investment income". It was reasonable and proper for the Queen's subjects to base their liability to tax for the current year on the provisions of Section 7(1)(b) of that Act. The 1974 Act provided that investment income should be subject to a surcharge at the rate of 15 per cent. to the extent that that income exceeded £2,000 in the current financial year. But Clause 5 of the present Bill provides retrospectively—that is to say, from 5th April last—that there shall be a change in the Act passed by Parliament as recently as July last year.
I wish to protest in the most vigorous terms against the whole principle of retrospective legislation. I draw no comfort from the fact that previous Tory Chancellors of the Exchequer have resorted to the same device. It is a practice which is thoroughly discreditable and disreputable—whether the practice comes from this side of the House or from the Labour benches.
Secondly, I wish to refer to the remarks made by the Chief Secretary to the Treasury at the beginning of this afternoon's proceedings. He appeared to defend the provisions of the capital transfer tax on the ground—a ground which I do not accept—that they would not apply to a great many people. That was his case. I do not think he is right. I believe the provisions of that tax will affect not just thousands but millions of our fellow citizens. Precisely the same

argument has been advanced in respect of Clause 5 of the present Bill.
We are urged by the Government Front Bench "Don't worry—the investment income surcharge applies to only comparatively few people." But is it not the function of the Government to be fair not just to the majority but also to the minority? Or is it the present Government's view that it is only the big battalions who count. I fear that it is.
I wish also to reject the argument that because only a comparatively few people are affected by the investment income surcharge that is a category of persons who can be disregarded. I wish to assert the opposite proposition. It is true that the number of people who will be affected by the provisions of Clause 5 will be comparatively small. But let us think to which people the clause will apply. It will apply in the main to those who spent their working lives saving, denying themselves that excess of consumption which the present Government are encouraging the rest of us to indulge in. We are talking of a category of people who desire not less consideration but the greatest possible consideration of all.
I say that for the following reason. The big battalions in our society are able, in an inflationary period, to protect themselves by means of their unions and their bargaining capacity. However, those persons to whom we refer are literally defenceless against inflation. Government supporters cannot deny that. The trouble with them is that they seem to be concerned with fairness only for the big battalions and reject the concept of fairness for those people with no one to defend them save the Opposition.

Mr. Russell Kerr: Surtax payers of the world unite.

Mr. Gow: The doctrine of fairness should apply to all our citizens, and, above all, to those who have saved during their lifetime. I wish to give a concrete example. Suppose that a man reaches the age of 65 after a lifetime of toil. Suppose a miner has saved £20,000 during a lifetime.

Mr. Joseph Ashton: What does he earn as a miner?

Mr. Gow: That is exactly the point I am making. Suppose that, after a lifetime of toil, a man, having denied himself the consumption which is available to people nowadays, has saved £20,000 and invested it at 8 per cent. That would produce £1,600 a year, the purchasing power of which has fallen dramatically over the past four years. Is it fair that that savings income should be hit still further by this mean and petty investment income surcharge? It is right that the Opposition should champion the cause of those who have saved, who have been hit hardest by inflation, and who have no redress against the evils of inflation.
For those reasons I support the amendments.

Mr. Patrick Cormack: I associate myself with the excellent comments of my hon Friend the Member for Eastbourne (Mr. Gow).
I should like to refer to the points raised with regard to the disabled. I am glad to see the hon. Member for Stoke-on-Trent, South (Mr. Ashley) in his place. He made a very forceful contribution. I hope that the Treasury Bench will listen to what he said and will act accordingly.
The hon. Gentleman spoke about being chairman of the all-party group for the disabled, in which connection he does a great deal of valuable work. I cannot help but put in some special pleading on my own account. As chairman of the all-party group for widows I come into contact with a vast number of people who are affected by these amendments. There are many widows dependent on investment incomes, but no one would suggest that they are among the rich of the land, as the hon. Member for Holborn and St. Pancras, South (Mrs. Jeger) will agree.

Mr. Ashton: Did the hon. Gentleman vote for televising the House?

Mr. Cormack: I did not vote for televising the proceedings of the House.
The widows are particularly hard hit. I hope that the Chief Secretary to the Treasury will heed my words. The Minister courteously received a deputation from the National Association of Widows who spoke about many of the problems they face. Its representatives did not raise this specific matter. But the National Association—[Interruption.]—

Mr. Deputy Speaker (Sir Myer Galpern): I think that the hon. Gentleman has sufficiently awakened too many hon. Members. I cannot hear what he is saying.

Mr. Cormack: I am delighted with the electric effect of my words. I wish that the shock was universal. But I hope that at least there will be an effect.
Although it is right and proper to talk about the disabled, whose needs are real, and about the widows, whose needs are equally real and who will be affected greatly unless there is a substantial amendment along the lines proposed, it is equally right to talk about the saving classes—the able-bodied, those upon whom the country depends. The country depends for its future on the saving classes more than on any other group of people—

Mr. Ashton: What about the workers?

Mr. Cormack: The workers are the same people.

Mr. Ashley: Speaking as the former Chairman of the Widows' and Single-Parents' Group and the hon. Gentleman's predecessor, I cannot help feeling that he is damaging the case for this amendment and supporting the Government's opposition to disabled people. This is precisely what the Government will say. We have been pleading for disabled people to be allied to old people. The more categories that there are, the weaker our case becomes. I have fought for widows for years—my mother was a widow—just as the hon. Gentleman has. But he is undermining the case made so eloquently by hon. Members on both sides of the House.

Mr. Cormack: Not at all. I do not dissent from the hon. Gentleman's argument. In widening it, I am not destroying the validity of his case. There are many amendments on the Notice Paper specifically concerned with the disabled. If the Government accept one of those and not the others, I shall be pleased. But I am seeking to suggest that there are many other categories and that, by the transference of a very small sum of money, the whole case could be met—disabled, widows, and the others about whom I am talking. If the Government indicate that they will do something for the disabled and for no one else, I shall


rejoice in that little, at least. But I hope that they will accept the good sense of our aguments and do a little more. That is a perfectly fair attitude to adopt.
Going back to what I was saying, it is upon the saving classes that the country depends, and I reply to the intervention of the hon. Member for Bassetlaw (Mr. Ashton) by saying that many of them are ordinary workers who have in their working lives put a little away for a rainy day.

Mr. Ashton: Not £20,000.

Mr. Cormack: But we do not need £20,000. We are talking in terms of people who in their working lives have saved perhaps £6,000 or £7,000. After 40 years, £7,000 is not a vast sum. Yet these people will be penalised if the Government's intentions are enacted as they stand in the Bill at the moment.
11 p.m.
We are talking not about the vastly wealthy, the extravagantly rich—we do not find many of them anyhow—but about ordinary people. The self-employed have been mentioned many times. I stress that we are talking about ordinary workers. If the Government in the Coal Industry Bill can make proper provision, with the acclamation of hon. Members on both sides of the House, for those stricken down by pneumoconiosis, that is right and proper. But why do that Government, who have shown proper sensitivity in that regard, clobber those who have saved for their old age? It seems a ridiculously mean and petty attitude.
I hope that the Minister, who I am sure practises thrift even if the Chancellor does not—the hon. Gentleman told us that he spends his money as he gets it, but I am sure that he must practise thrift—realises that there are virtues and values in it. Let both Ministers—[HON. MEMBERS: "Three."] Indeed, three. The Paymaster-General is most appropriately named. Let the Ministers draw upon their experience and do something for those who have worked and saved and upon whom the prosperity of this country depends.
Ministers are trotting up and down the country time and again bemoaning the level of investment. How can they expect to encourage investment—

Mr. Russell Kerr: Travelling first class.

Mr. Cormack: Travelling first class, as the hon. Gentleman, in his helpful intervention, points out. We are delighted that he is in the Chamber. If Ministers are travelling up and down the country bemoaning the level of investment, what nonsense it makes of their protestations if they actively discourage the saving classes. At an earlier stage I referred to the Government as the scourge of the saving classes. They have not yet earned remission from that title. I sincerely hope that they will and that we shall have a sensible reply tonight.

The Minister of State, Treasury (Mr. Robert Sheldon): The hon. Member for Staffordshire, South-West (Mr. Cormack) accurately reminded or informed the House that I was privileged to receive a delegation, which he accompanied, from the National Association of Widows. One advantage of such meetings is in being able to remove a number of misconceptions, which I think the hon. Gentleman will agree was achieved on that occasion.
I shall attempt to remove a number of misconceptions, as I see them, arising out of the debate this evening. We are discussing 10 amendments which are being taken together. The House will understand that, although I was happy to accept that these amendments should be taken together, it means that we must cover a fair amount of ground. Therefore, I must beg the indulgence of the House if I deal with each in turn.
First, I should like to reply to the hon. Member for Berwick-upon-Tweed (Mr. Beith) on the Federated Superannuation Scheme for Universities. I should be happy to go into that matter in greater detail, but, as it was mentioned only by the hon. Gentleman, perhaps a shorter version of what I might otherwise have said will be acceptable to the House in present circumstances.
The FSSU is an old style superannuation scheme. The code under which it was approved goes back quite a long time. It is unusual in present circumstances in that the whole benefit can be taken in a lump sum. The hon. Gentleman will know that that is now being phased out. However, the point remains that income from the investment


of the lump sum received is still income from investment. If there are any other matters, I shall be happy to have further discussions with the hon. Member or even to go into it further by correspondence.

Mr. Beith: I appreciate the Minister's desire to be brief, but he has stated the fact without explaining his attitude to it. He said that it is investment income, but the point that I sought to make is that it is someone's pension and is in every way comparable to the pension of someone who invests in a superannuation scheme. Why should it be distinguished for treatment when he receives it on retirement?

Mr. Sheldon: This is the misconception that I should like to go into at some length. I am sorry, but it is not possible to deal with this briefly. I shall be happy to explain the full circumstances to the hon. Member, and perhaps he would accept that.

Mr. Beith: rose—

Sir John Hall: rose—

Mr. Sheldon: I had understood that hon. Members would have preferred to see progress, but, if the House wishes, I will now make the explanation that I had hoped to cut short.

Mr. David Howell: Of course we should like to examine all these matters in full, but the difficulty, to which the Minister alluded, is that the Government have put the strong arm on this debate, and we cannot fully discuss these important amendments.

Mr. Sheldon: We understand that and have debated it. What we have before us is one amendment which it seems the House wishes me to examine at greater length than I had intended.
The amendment of the hon. Member for Berwick-upon-Tweed seeks to give the lower thresholds to those who on retirement receive lump sum payments from the superannuation arrangements and the retirement annuity contracts approved by the Board of Inland Revenue or from private pension arrangements of the kind the hon. Member described. The fully approved schemes under the new or the old codes

cannot normally begin paying annuities to someone under 60. The hon. Gentleman may be arguing that, since the Government recognise 60 as the proper age for paying retirement benefits in testing the eligibility of a superannuation fund for tax concessions, it is only legitimate to test the eligibility of a person under the schemes that he has in mind in the same way.
But this argument is misconceived. The fact that a company or a scheme—the argument applies to both—can, with full tax benefit, provide its employees with a pension at 60 is no reason why those with large investment incomes should benefit from yet further tax concessions. Indeed, an employee in that position might be rather more fortunate than someone who has to wait until 65 to get a pension. The case is not made any stronger by the fact that he may opt to take part of his pension rights in the form of a lump sum. He gains the additional security of the capital sum. He may or may not choose to invest it in an income-bearing form, but in either case there is no reason why he should benefit from a lower surcharge threshold five years earlier than other people.
I could give some details of how the amendment does not even fulfil the hon. Member's intention, but I should like to move on to the nine other amendments, to which most interest seems to have been directed.
On Amendment No. 349, we believe that the investment income surcharge threshold was fixed far too high at £2,000 in 1973–74. That is the starting point of our criticism of what happened then. The figure of £2,000 for the investment income surcharge in 1973–74 was a very substantial sum of money by comparison with that of a number of people who were faced with very great difficulties because of the economic situation as it then was as well as what it subsequently became. Under the legislation that we have provided, the first £1,000 over the new threshold is to be taxed at 10 per cent. Because of this the extra surcharge cannot be greater than £100 in total.
There is another comparison that the House could make if it so chose. That is the treatment of investment income by


comparison with what existed before the present unified system was introduced by the Conservative Government. Before then taxpayers paid the full standard rate and got relief for earned income at the rate of two-ninths. That was very substantially more than the investment income surcharge which replaced it. This was a very big distribution to the better off. Like all these arrangements, whenever they are made, the biggest advantages accrue to the best off, because they pay the highest rate of tax.

Mr. Lawson: In Committee we heard this argument about the comparison in relation to the 1972–73 period before the unified rates. It was pointed out that this is a completely inadequate comparison because of the rate of inflation. Prices have risen by about 35 per cent. since then. Therefore, one cannot compare £1,000 then with £1,000 now. In addressing himself to that matter, perhaps the Minister would also address himself to Amendment No. 362, which takes account of the inflationary element.

Mr. Sheldon: The hon. Gentleman is pressing me to make progress, and I am happy to respond to that. The point I was making is that a very considerable advantage was given to those with investment income at the time of the introduction of the unified tax system. This big advantage is something that people have to accept, but, at the same time as they have come to accept it, we must look at it also in the context of the assistance being sought by hon. Members of the Opposition for this kind of taxpayer.
The hon. Member for Blaby (Mr. Lawson) thought that it was a question of pique, and that the Government, having been defeated in a Division last year, sought to restore the position that they had attempted to create. He may bandy those kinds of words about, and I might respond also. The intention of the Government was clear. It was stated so, both in the House and in the Bill. When the Division was lost it was also repeatedly stated. At no time could anyone have been under any misapprehension about what it was the Government's intention to achieve, when they were so able to act. This we have been able to do, and this is the result that we have before us.

Mr. William Clark: This is arrogance.

Mr. Sheldon: The hon. Gentleman might call it arrogance. I would say that it is maintaining what we said we would do when we were in a position to do it, and fulfilling our undertakings, which is something he might care to contemplate.
I should like to turn to Amendments Nos. 341 and 344. Amendment No. 341 is an attempt to apply the reduced surcharge threshold of £1,500 for the elderly to a married couple when the wife became 60 years old if that was earlier than when the husband became 65. The effect would be, as can be readily understood, to give a decided advantage to those married men who are younger than their wives or near the age of their wives. As such it discriminates against other married men as well as single men. I find it difficult to understand the basis of such a form of discrimination. We believe that the fairest arrangement in dealing with these matters is to have the same qualifying age for men as for women for the purposes of the investment income surcharge and taxation generally. That is what we have sought to achieve.

11.15 p.m.

Mr. Newton: As I understand it, the Bill is open to exactly the criticism that the Minister has just made. If a man is 60 and his wife becomes 65 he will receive the benefit. All that I am saying is that women should be treated the same under these provisions as they are under the National Insurance Scheme. The criticism that the Minister has made applies to his own Bill. It applies, as it were, to a different point under my proposal.

Mr. Sheldon: No, the arrangements under the amendment as it stands are that when a wife becomes 60—and if that is sooner than when the husband becomes 65—the relief will be given. If the hon. Gentleman cares to table an alternative amendment that seeks to fulfil his aims I shall be pleased to consider it.

Mr. Newton: When?

Mr. Sheldon: Other Finance Bills come to the House from time to time. Amendments may be tabled and new clauses may be suggested for the interest and improvement of our debates.
I now turn to the problems of the disabled and to Amendments Nos. 16, 17 and 18. Under the clause as it stands the first £1,000 of the investment income has a zero surchange, the following £1,000 has a surcharge of 10 per cent. and the remainder has a surcharge of 15 per cent. For married couples, where either partner is older than 65, the sucharge is zero for the first slice of £1,000. The next slice of £500, is again zero, and a further slice of £500 is at 10 per cent. Thereafter the rate is 15 per cent.
I draw the attention of the House to the notable contribution of my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley). What he said is best understood by those Members who have the interests of certain sections of the community at heart. They are represented tonight; I see them in various parts of the Chamber. They understand that the best way of obtaining justice is to act in the manner adopted by my hon. Friend—namely, to bring to the attention of the House the difficulties, the needs and the requirements of various sections of the community. In that way they inform and educate every one of us. I am grateful to my hon. Friend, and I am sure that other hon. Members will express their gratitude to those who inform us on such matters.

Mr. Gow: The Minister will recall that the Chancellor first introduced the proposals now in the Bill when he made his Budget Statement on 26th March 1974. The Minister will also remember that in the Finance Act that received Royal Assent on 31st July the Chancellor's proposals were reversed. If the figure for the investment income surcharge was right on 26th March 1974, how can it be right in March 1975, bearing in mind that we have had inflation during that time at a rate of over 25 per cent.?

Mr. Sheldon: I am sorry that the hon. Gentleman seeks to go back on discussions we have had and comments I have made. I assure him that I shall deal with that before I conclude.
The approach of my hon. Friend the Member for Stoke-on-Trent, South is that which I most admire. He drew attention to these problems, as did my hon. Friend the Member for Eccles (Mr. Carter-Jones). The amendments deal with those who are

receiving an invalidity pension, who are unemployed and receiving an attendance allowance, who are unemployed and are registered disabled persons under the Disabled Persons (Employment) Act 1944, and who are unemployed and registered disabled persons under the Chronically Sick and Disabled Persons Act 1970.
I note with great interest the proposals which are put forward from time to time for giving help to the disabled in many ways. I note, too, the way in which this has been put forward as a change in the tax system. Such changes are frequently made and they are frequently debated in the House of Commons. I do not believe that there is any lack of understanding of the problems of the physically handicapped, because of the action of so many of my hon. Friends and hon. Gentlemen generally.
This is a big general problem that frequently arises in our debates on taxation. I suggest that at least one reason why it arises in our debates on taxation is that we tend to have more debates on taxation than on most other matters, so there is a more convenient slot there than in many other areas.
The tax system is not a particularly good way to help the physically handicapped. The Department of Health and Social Security does the job very much better. The whole point about the tax system is that it gives most to those who have most. Those at the higher end of the income scale receive the most. That is not in itself an inescapable way of saying that we can do nothing about it, but it shows that there is a deficiency in the operation of the system.

Mr. Ashley: I greatly appreciate what my hon. Friend is saying. He is obviously leaning over backwards in an effort to oblige both sides of the House. I am disturbed by the narrow party political stance adopted by some hon. Members opposite. Nevertheless, my hon. Friend must answer this question. Can he justify helping old people and not helping the disabled? This is the nub of the problem.
I appreciate the difficulties. I am not trying to score party points. I hope to vote with the Government. I want a concession. I would appreciate it if my hon. Friend could promise me a concession of some kind, because there is no point in saying "I sympathise"


unless sympathy is translated into action. Is it possible to make some concession to disabled people? If that can be done, I shall happily vote with the Government? Can my hon. Friend help me?

Mr. Sheldon: I am happy to respond. I will deal with the problem of the old in a moment. My hon. Friend rightly compared the problem of the disabled with the concessions given to the old. For that reason, I said that I wished to deal with the problems of the old, to show why, in my view, they can be treated under the tax system more readily than can the problems of the disabled.

Mr. Hannam: rose—

Mr. Sheldon: May I give the House a bit of advice? In dealing with the problems of certain groups of people, one can use one instrument to greater effect than another. There is no difference between the aim sought by my hon. Friend the Member for Stoke-on-Trent, South and those who want to assist the disabled and the aim which I seek.

Mr. William Clark: rose—

Mr. Sheldon: If I may be allowed to continue, I was about to say that one method is better for treating certain aspects of the problem and another method is better for treating others, and, if I am allowed to proceed, I shall, I hope, make clear what I am trying to establish.
If we use the tax system to give benefits of this kind, what we are doing is applying a sort of inverse means test. What happens when the tax system is used in that way? Whatever is given, most is given to those who have most. [HON. MEMBERS: "Not given."] All right. I had assumed that the House had grown up and was not prepared to entertain arguments about whether one was taking away or giving. The whole argument here depends on the treatment which the Department of Health and Social Security gives, on its side, in making contributions, and what the Inland Revenue does, on its side of the same problem, in not taxing people. I believe that in a wider range of problems the one can be made the equal of the other, and what one is concerned with at the end of the day is how much extra stays in a person's pocket and how much is taken out.

Several Hon. Members: rose—

Mr. Sheldon: That applies to both aspects of the matter. I remember what was said by hon. Members opposite who fought hard for the tax credit system. I see the Chairman of that Select Committee here, the hon. Member for Croydon, South (Mr. Clark). He accepted that argument, and he now produces arguments which run counter to the very case which was the basis of that proposed innovation in our tax system.

Mr. William Clark: The hon. Gentleman need not worry about whether the House has grown up. It has. But I wonder whether he has grown up, for he has not appreciated the argument. It is not a question of giving something back or giving something to the disabled. Our case is based on the circumstances of the disabled person. If someone is disabled through his job, he goes to the court for compensation, and the court gives him compensation for his loss of earnings. Whatever he receives is supposed to compensate him for his lack of earning capacity.
That disabled person then enjoys investment income on the compensation awarded by the court. Why should that person be clobbered if his investment income is £20 a week and his earning capacity has been reduced by £30 a week? The Minister must address his mind to that. There is no point in suggesting that the House has not grown up. It certainly has, and it is about time he did.

Mr. Sheldon: The hon. Gentleman is now shifting his ground. I do not object to that, but I must remind him that what we were debating a few moments ago, before his rather lengthy intervention, was the equivalence between tax allowances and grants.

Mr. William Clark: Answer the question.

Mr. Sheldon: I was pointing out what I believe to be the right relationship between the two, and saying that when we give a tax relief, using the tax system instead of the social security system, we give most to those who have most rather than, as the DHSS system rightly does, give most to those who have least. That is the distinction. The Department of


Health and Social Security can operate in that way but the tax system cannot.
11.30 p.m.
I shall now deal with the Government's record of help to the disabled and the least well off. This concerns the task of the social security service as it exists today. There is a fundamental reason why we give relief to the old person but not to the disabled. It is not that the latter group is any less deserving. That must be clearly understood.

Mr. Keith Stainton: Address the Chair.

Mr. Sheldon: I am speaking in the direction of my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) in order that he may fully understand the position.
The disabled, of course, get much more than our sympathy. They also get our understanding.

Mr. Lawson: Humbug.

Mr. Sheldon: The hon. Member should contain himself. What is happening in the tax system is—

Mr. Deputy Speaker: Order. I must ask the Minister to address the Chair, not the Paymaster-General. [Interruption.] Hon. Members should address the Chair. It leads to less trouble if they do.

Mr. Sheldon: I am not sure that you understand the reason for my turning towards my hon. Friend the Member for Stoke-on-Trent, South, Mr. Deputy Speaker.

Mr. Deputy Speaker: In the circumstances, I sincerely apologise to the Minister.

Mr. Sheldon: There is a particular problem, Mr. Deputy Speaker, and I am grateful for your understanding.
The justification for giving assistance to the over-65s through the tax system is not that they are worthy of our sympathy and understanding. That sympathy and understanding must apply to a greater extent to many of the cases that have been mentioned by my hon. Friends the Members for Stoke-on-Trent, South and Eccles. The over-65s are dependent for a large element of their income on

the savings they have made throughout their lives. Taxation is levied on the basis of capacity to pay. In the case of the disabled we have to consider how we can channel most money to those most in need. That is the whole basis of the social security approach to the matter.

Sir John Hall: Many of the disabled persons referred to by my hon. Friends are living on savings accumulated when they were at work. Why should they not be treated the same as someone 65 years old who is also living on accumulated savings?

Mr. Sheldon: I have listened to the hon. Member with great respect on many occasions, but in view of the action taken by his Government on these matters his party's attitude tonight strikes me as being very close to the humbug which has been referred to on previous occasions.

Mr. Ashley: I apologise for intervening once more. I am anxious not only to vote for the Government but against the Opposition, because they are making party political points. Will my hon. Friend answer the question? He has not yet drawn a satisfactory distinction between old people and disabled people. I cannot support him if the Bill does not take account of disabled people.
May I highlight the position by asking my hon. Friend whether thalidomide children will be exempt from this tax, as old people are, or will they have to pay it?

Mr. Sheldon: My hon. Friend will know better than most hon. Members the arrangements that are made for the disabled—arrangements of a kind that I have explained to the House. What it is important to understand is the fact that when we are talking about the problems of the disabled we also have to compare their sources of income, and the sources of income of the older people tend to be more uniform than the sources of income of the disabled.
I want to speak about the amendment concerning the combined investment income for those with incomes not greater than £3,000—Amendment No. 383. Under this there is a separate income threshold of £1,000 for each spouse. It is held that as a result there is to be double surcharge threshold for a married couple by comparison with a single person. The figures for the married couple with


a total income of £3,000 will be £1,000 for the wife and £1,000 for the husband. The single person—[Interruption.] I am trying to reply to some of the points made. We all understand the difficulties, but I am trying to answer the debate. If the right hon. Member for Yeovil (Mr. Peyton) had been present he would have been aware that some of his hon. Friends put questions to me, which questions I am now trying to answer.

Sir Geoffrey Howe: I intervene concisely to make the point that the current debate has been running for just over two hours and the Minister, in replying, has taken up more than 25 per cent. of that time. Quite aside from wishing to debate these matters in the limited time available, we wish to divide on the issues now before the House. We shall therefore be grateful if the Minister will contain his remarks within a matter of seconds rather than minutes.

Mr. Sheldon: I am happy to oblige the House in whatever it wishes, but if the right hon. and learned Gentleman had turned round he would have seen many of his colleagues rising to their feet to ask me questions.
The House has had a comprehensive debate on this matter. What we have seen is quite clear, as a result of the amendments that have been moved. What the Government have been interested in doing is to restore equity between those paying investment income surcharge and those who are earning their money day by day. We believe that we have a reasonable relationship between the two—a relationship of a kind that right hon. and hon. Gentlemen on the Opposition side of the House never sought to achieve. We believe that we have that kind of relationship and that it is in the interests of our people.

Mr. David Howell: The Minister began his speech, which was an embarrassingly

pathetic effort, by reminding us that the House was in difficulties. It certainly is, because we have had to lump together the two sets of amendments on the clause on investment income surcharge affecting a whole range of people—the elderly, widows, superannuated, work people living on damages, and the disabled.

We had a telling intervention from the hon. Member for Stoke-on-Trent, South (Mr. Ashley), for whom I have a profound respect, who laid emphasis on the amendments concerned with the disabled.

In the few minutes left to us by the Minister's verbosity, I must tell my hon. Friends that, although my party stands for the savers, the superannuated, the elderly and single people struggling on a maintenance income, when I look at Members such as the Minister or the hon. Member for Meriden (Mr. Tomlinson) I do not think that we shall move Labour Members on these issues. I think that all those categories will have to fall beneath the Socialist heel. That is inevitable, much as we should like the time to argue it.

I believe that if we approach the matter in the right way we can save the disabled, if no one else, from the Socialist guillotine. [HON. MEMBERS: "Humbug."] If we can do that; if we can overcome the pathetic little cries of "Humbug" and the mutterings from the Treasury Bench, whose occupants put up such a pathetic performance; if we can combine to show the Government the shoddiness of their ways with regard to the disabled alone; then on this bad day for Parliament we may yet do some good.

I urge that we press both amendments.

Question put, That the amendment be made:—

The House divided: Ayes 269, Noes 282.

Division No. 122.]
AYES
[11.43 p.m.


Adley, Robert
Biffen, John
Buck, Antony


Aitken, Jonathan
Biggs-Davison, John
Budgen, Nick


Alison, Michael
Blaker, Peter
Bulmer, Esmond


Amery, Rt Hon Julian
Bowden, A. (Brighton, Kemptown)
Burden, F. A.


Atkins, Rt Hon H. (Spelthorne)
Boyson, Dr Rhodes (Brent)
Butler, Adam (Bosworth)


Awdry, Daniel
Bradford, Rev Robert
Carlisle, Mark


Bain, Mrs Margaret
Braine, Sir Bernard
Carson, John


Baker, Kenneth
Brittan, Leon
Chalker, Mrs Lynda


Banks, Robert
Brotherton, Michael
Channon, Paul


Beith, A. J.
Brown, Sir Edward (Bath)
Churchill, W. S.


Benyon, W.
Bryan, Sir Paul
Clark, Alan (Plymouth, Sutton)


Berry, Hon Anthony
Buchanan-Smith, Alick
Clark, William (Croydon S)




Clarke, Kenneth (Rushcliffe)
James, David
Rathbone, Tim


Clegg, Walter
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Rawlinson, Rt Hon Sir Peter


Cockcroft, John
Jessel, Toby
Rees, Peter (Dover &amp; Deal)


Cooke, Robert (Bristol W)
Johnston, Russell (Inverness)
Rees-Davies, W. R.


Cope, John
Jones, Arthur (Daventry)
Reid, George


Cormack, Patrick
Jopling, Michael
Renton, Rt Hon Sir D. (Hunts)


Corrie, John
Joseph, Rt Hon Sir Keith
Renton, Tim (Mid-Sussex)


Costain, A. P.
Kaberry, Sir Donald
Rhys Williams, Sir Brandon


Craig, Rt Hon W. (Belfast E)
Kellett-Bowman, Mrs Elaine
Ridley, Hon Nicholas


Crawford, Douglas
Kershaw, Anthony
Ridsdale, Julian


Critchley, Julian
Kilfedder, James
Rifkind, Malcolm


Crowder, F. P.
Kimball, Marcus
Rippon, Rt Hon Geoffrey


Davies, Rt Hon J. (Knutsford)
King, Evelyn (South Dorset)
Roberts, Michael (Cardiff NW)


Dean, Paul (N Somerset)
King, Tom (Bridgwater)
Roberts, Wyn (Conway)


Dodsworth, Geoffrey
Kitson, Sir Timothy
Ross, Stephen (Isle of Wight)


Douglas-Hamilton, Lord James
Knight, Mrs Jill
Ross, William (Londonderry)


du Cann, Rt Hon Edward
Lamont, Norman
Rossi, Hugh (Hornsey)


Dunlop, John
Lane, David
Rost, Peter (SE Derbyshire)


Durant, Tony
Langford-Holt, Sir John
Royle, Sir Anthony


Eden, Rt Hon Sir John
Latham, Michael (Melton)
Sainsbury, Tim


Edwards, Nicholas (Pembroke)
Lawrence, Ivan
Scott-Hopkins, James


Elliott, Sir William
Lawson, Nigel
Shaw, Giles (Pudsey)


Emery, Peter
Lester, Jim (Beeston)
Shaw, Michael (Scarborough)


Evans, Gwynfor (Carmarthen)
Lewis, Kenneth (Rutland)
Shelton, William (Streatham)


Ewing, Mrs Winifred (Moray)
Loveridge, John
Shepherd, Colin


Eyre, Reginald
MacCormick, Iain
Shersby, Michael


Fairbairn, Nicholas
McCrindle, Robert
Silvester, Fred


Farr, John
McCusker, H.
Sims, Roger


Fell, Anthony
Macfarlane, Neil
Sinclair, Sir George


Finsberg Geoffrey
MacGregor, John
Skeet, T. H. H.



Macmillan, Rt Hon M. (Farnham)
Smith, Cyril (Rochdale)


Fisher, Sir Nigel
McNair-Wilson, M. (Newbury)
Smith, Dudley (Warwick)


Fletcher-Cooke, Charles
McNair-Wilson, P. (New Forest)
Speed, Keith


Fookes, Miss Janet
Marshall, Michael (Arundel)
Spence, John


Fowler Norman (Sutton C'f'd)

Spicer, Jim (W Dorset)


Fox, Marcus
Marten, Neil
Spicer, Michael (S Worcester)


Fraser, Rt Hon H. (Stafford &amp; St)
Mates, Michael
Sproat, Iain


Freud, Clement
Mather, Carol
Stainton, Keith


Fry, Peter
Maude, Angus
Stanbrook, Ivor


Galbraith, Hon. T. G. D.
Mawby, Ray
Stanley, John


Gardiner, George (Reigate)
Maxwell-Hyslop, Robin
Steel, David (Roxburgh)


Gardner, Edward (S Fylde)
Mayhew, Patrick
Steen, Anthony (Wavertree)


Gilmour, Rt Hon Ian (Chesham)
Meyer, Sir Anthony
Stewart, Donald (Western Isles)


Gilmour, Sir John (East Fife)
Miller, Hal (Bromsgrove)
Stewart, Ian (Hitchin)


Glyn, Dr Alan
Miscampbell, Norman
Stokes, John


Goodhart, Philip
Mitchell, David (Basingstoke)
Stradling Thomas, J.


Goodhew, Victor
Moate, Roger
Taylor, R. (Croydon NW)


Goodlad, Alastair
Molyneaux, James
Taylor, Teddy (Cathcart)


Gorst, John
Monro, Hector
Tebbit, Norman


Gow, Ian (Eastbourne)
Montgomery, Fergus
Temple-Morris, Peter


Gower Sir Raymond (Barry)
Moore, John (Croydon C)
Thatcher, Rt Hon Margaret


Grant, Anthony (Harrow C)
More, Jasper (Ludlow)
Thomas, Dafydd (Merioneth)


Gray, Hamish
Morgan, Geraint
Thomas, Rt Hon P. (Hendon S)


Grieve, Percy
Morgan-Giles, Rear-Admiral
Thompson, George


Griffiths, Eldon
Morris, Michael (Northampton S)
Thorpe, Rt Hon Jeremy (N Devon)


Grimond, Rt Hon J.
Morrison, Charles (Devizes)
Townsend, Cyril D.


Grist, Ian
Morrison, Hon Peter (Chester)
Tugendhat, Christopher


Gryils, Michael
Mudd, David
van Straubenzee, W. R.


Hall, Sir John
Neave, Airey
Vaughan, Dr Gerard


Hall-Davis, A. G. F.
Nelson, Anthony
Viggers, Peter


Hamilton, Michael (Salisbury)
Neubert, Michael
Wainwright, Richard (Colne V)


Hampson, Dr Keith
Newton, Tony
Wakeham, John


Hannam, John
Normanton, Tom
Walters, Dennis


Harrison, Col Sir Harwood (Eye)
Nott, John
Warren, Kenneth


Harvie Anderson, Rt Hon Miss
Onslow, Cranley
Watt, Hamish


Hastings, Stephen
Oppenheim, Mrs Sally
Weatherill, Bernard


Havers, Sir Michael
Osborn, John
Wells, John


Hawkins, Paul
Page, John (Harrow West)
Welsh, Andrew


Hayhoe Barney
Page, Rt Hon R. Graham (Crosby)
whitelaw, Rt Hon William


Henderson, Douglas
Paisley, Rev Ian
Wiggin, Jerry


Hicks, Robert
Pardoe, John
Wigley, Dafydd


Higgins, Terence L.
Parkinson, Cecil
Wilson, Gordon (Dundee E)


Holland, Philip
Pattie, Geoffrey
Winterton, Nicholas


Hooson, Emlyn
Penhaligon, David
Wood, Rt Hon Richard


Hordern, Peter
Percival, Ian
Young, Sir G. (Ealing, Acton)


Howe Rt Hon Sir Geoffrey
Peyton, Rt Hon John
Younger, Hon George


Howell, David (Guildford)
Pink, R. Bonner



Howell, Ralph (North Norfolk)
Powell, Rt Hon J. Enoch
TELLERS FOR THE AYES:


Howells, Geraint (Cardigan)
Prior, Rt Hon James
Mr. Russel Fairgrieve and


Hurd, Douglas
Raison, Timothy
Mr. Spencer Le Marchan







NOES


Abse, Leo
Fernyhough, Rt Hon E.
Madden, Max


Allaun, Frank
Flannery, Martin
Magee, Bryan


Anderson, Donald
Fletcher, Raymond (Ilkeston)
Mahon, Simon


Archer, Peter
Fletcher, Ted (Darlington)
Marks, Kenneth


Armstrong, Ernest
Foot, Rt Hon Michael
Marquand, David


Ashley, Jack
Ford, Ben
Marshall, Dr Edmund (Goole)


Ashton, Joe
Forrester, John
Marshall, Jim (Leicester S)


Atkins, Ronald (Preston N)
Fowler, Gerald (The Wrekin)
Mason, Rt Hon Roy


Atkinson, Norman
Fraser John (Lambeth, N'w'd)
Meacher, Michael


Bagier, Gordon A. T.
Freeson, Reginald
Mellish, Rt Hon Robert


Barnett, Guy (Greenwich)
Garrett, John (Norwich S)
Mikardo, Ian


Barnett, Rt Hon Joel
Garrett, W. E. (Wallsend)
Millan, Bruce


Bates, Alf
Gilbert Dr John
Miller, Dr M. S. (E Kilbride)


Benn, Rt Hon Anthony Wedgwood
Ginsburg, David
Miller, Mrs Millie (Ilford N)


Bennett, Andrew (Stockport N)
Golding, John
Mitchell, R. C. (Soton, Itchen)


Bidwell, Sydney
Gould, Bryan
Molloy, William


Bishop, E. S.
Gourlay, Harry
Moonman, Eric


Blenkinsop, Arthur
Graham, Ted
Morris, Alfred (Wythenshawe)


Boardman, H.
Grocott, Bruce
Morris, Charles R. (Openshaw)


Booth, Albert
Hamilton, James (Bothwell)
Morris, Rt Hon J. (Aberavon)


Boothroyd, Miss Betty
Hamilton, W. W. (Central Fife)
Moyle, Roland


Bottomley, Rt Hon Arthur
Hamling William
Mulley, Rt Hon Frederick


Boyden, James (Bish Auck)
Hardy, Peter
Murray, Rt Hon Ronald King


Bradley, Tom
Harper, Joseph
Newens, Stanley


Bray, Dr Jeremy
Harrison, Walter (Wakefield)
Noble, Mike


Brown, Hugh D. (Provan)
Hattersley, Rt Hon Roy
Oakes, Gordon


Brown, Robert C. (Newcastle W)
Hatton, Frank
Ogden, Eric


Brown, Ronald (Hackney S)
Hayman, Mrs Helene
O'Halloran, Michael


Buchan, Norman
Healey, Rt Hon Denis
Orbach, Maurice


Butler, Mrs Joyce (Wood Green)
Heffer, Eric S.
Orme, Rt Hon Stanley


Callaghan, Jim (Middleton &amp; P)
Hooley, Frank
Ovenden, John


Campbell, Ian
Horam, John
Owen, Dr David


Canavan, Dennis
Howell, Denis (B'ham, Sm H)
Padley, Walter


Cant, R. B.
Hoyle, Doug (Nelson)
Palmer, Arthur


Carmichael, Neil
Huckfield, Les
Park, George


Carter, Ray
Hughes, Mark (Durham)
Parker, John


Carter-Jones, Lewis
Hughes, Robert (Aberdeen N)
Parry, Robert


Castle, Rt Hon Barbara
Hughes, Roy (Newport)
Pendry, Tom


Clemitson, Ivor
Hunter, Adam
Perry, Ernest


Cocks, Michael (Bristol S)
Irving, Rt Hon s. (Dartford)
Phipps, Dr Colin


Cohen, Stanley
Jackson, Colin (Brighouse)
Prentice, Rt Hon Reg


Coleman, Donald
Jackson Miss Margaret (Lincoln)
Prescott, John


Colquhoun, Mrs Maureen
Janner, Greville
Price, C. (Lewisham W)


Concannon, J. D.
Jay, Rt Hon Douglas
Price, William (Rugby)


Conlan, Bernard
Jeger, Mrs Lena
Richardson, Miss Jo


Cook, Robin F. (Edin C)
Jenkins Hugh (Putney)
Roberts, Albert (Normanton)


Corbett, Robin
Jenkins, Rt Hon Roy (Stechford)
Roberts, Gwilym (Cannock)


Cox, Thomas (Tooting)
John Brynmor
Robertson, John (Paisley)


Craigen, J. M. (Maryhill)

Roderick, Caerwyn



Johnson, James (Hull West)
Rodgers, George (Chorley)


Cronin, John
Jonnson, Walter (Derby S)
Rodgers, William (Stockton)


Crosland, Rt Hon Anthony
Jones, Alec (Rhondda)
Rooker, J. W.


Cryer, Bob
Jones, Barry (East Flint)
Roper, John


Cunningham, G. (Islington S)
Jones, Dan (Burnley)
Rose, Paul B.


Cunningham, Dr J. (Witeh)
Judd, Frank
Ross, Rt Hon W. (Kilmarnock)


Dalyell, Tam
Kaufman, Gerald
Rowlands, Ted


Davidson, Arthur
Kelley, Richard
Ryman, John


Davies, Bryan (Enfield N)
Kerr, Russell
Sandelson, Neville


Davies, Denzil (Llanelli)
Kilroy-Silk, Robert
Sedgemore, Brian


Davis, Ifor (Gower)
Kinnock, Neil
Selby, Harry


Davis, Clinton (Hackney C)
Lamble, David
Shaw, Arnold (Ilford South)


Deakins, Eric
Lamborn, Harry
Sheldon, Robert (Ashton-u-Lyne)


Dean, Joseph (Leeds West)
Lamond, James
Shore, Rt Hon Peter


de Freitas, Rt Hon Sir Geoffrey
Latham, Arthur (Paddington)
Short, Rt Hon E. (Newcastle C)


Dell, Rt Hon Edmund
Leadbitter, Ted
Short, Mrs Renée (Wolv NE)


Dempsey, James
Lee, John
Silkin, Rt Hon John (Deptford)


Doig, Peter
Lewis, Ron (Carlisle)
Silkin, Rt Hon S. C. (Dulwich)


Dormand, J. D.
Lipton, Marcus
Sillars, James


Douglas-Mann, Bruce
Litterick, Tom
Silverman, Jullus


Duff, A. E. P.
Lomas, Kenneth
Skinner, Dennis


Dunn, James A.
Loyden, Eddie
Small, William


Dunnett, Jack
Luard, Evan
Smith, John (N Lanarkshire)


Dunwoody, Mrs Gwyneth
Lyon, Alexander (York)
Snape, Peter


Eadie, Alex
Lyons, Edward (Bradford W)
Spearing, Nigel


Edelman, Maurice
McCartney, Hugh
Spriggs, Leslie


Edge, Geoff
McElhone, Frank
Stallard, A. W.


Edwards, Robert (Wolv SE)
MacFarquhar, Roderick
Stewart, Rt Hon M. (Fulham)


Ellis, Tom (Wrexham)
McGuire, Michael (Ince)
Stoddart, David


English, Michael
Mackenzie, Gregor
Stott, Roger


Evans, Ioan (Aberdare)
Mackintosh, John P.
Strang, Gavin


Evans, John (Newton)
Maclennan, Robert
Strauss, Rt Hon G. R.


Ewing, Harry (Stirling)
McMillan, Tom (Glasgow C)
Summerskill, Hon Dr Shirley


Faulds, Andrew
McNamara, Kevin
Swain, Thomas







Taylor, Mrs Ann (Bolton W)
Walker, Harold (Doncaster)
Williams, Rt Hon Shirley (Hertford)


Thomas, Jeffrey (Abertillery)
Walker, Terry (Kingswood)
Williams, W. T. (Warringon)


Thomas, Mike (Newcastle E)
Ward, Michael
Wilson, Alexander (Hamilton)


Thomas, Ron (Bristol NW)
Watkins, David
Wilson, Rt Hon H. (Huyton)


Thorne, Stan (Preston South)
Watkinson, John
Wilson, William (Coventry SE)


Tierney, Sydney
Weitzman, David
Wise, Mrs Audrey


Tinn, James
Wellbeloved, James
Woodall, Alec


Tomlinson, John
White, Frank R. (Bury)
Wrigglesworth, Ian


Torney, Tom
White, James (Pollok)
Young, David (Bolton E)


Urwin, T. W.
Whitehead, Phillip



Varley, Rt Hon Eric G.
Whitlock, William
TELLERS FOR THE NOES:


Wainwright, Edwin (Dearne V)
Willey, Rt Hon Frederick
Mr. John Ellis and


Walden, Brian (B'ham, L'dyw'd)
Williams, Alan (Swansea W)
Mr. Laurie Pavitt

Question accordingly negatived.

Amendment proposed: No. 16, in page 4, line 1, after 'more', insert
'or was in receipt of an invalidity pension or unemployed and in receipt of an attendance allowance'.—[Mr. Hannam.]

Question put. That the amendment be made:—

The House divided: Ayes 269, Noes 274.

Division No. 123.]
AYES
[11.56 p.m.


Adley, Robert
Eyre, Reginald
Jessel, Toby


Aitken, Jonathan
Fairbairn, Nicholas
Johnston, Russell (Inverness)


Alison, Michael
Fairgrieve, Russell
Jones Arthur (Daventry)


Amery, Rt Hon Julian
Farr, John
Jopling, Michael


Atkins, Rt Hon H. (Spelthorne)
Fell, Anthony
Joseph, Rt Hon Sir Keith


Awdry, Daniel
Finsberg Geoffrey
Kaberry, Sir Donald


Bain, Mrs Margaret
Fisher, Sir Nigel
Kellett-Bowman, Mrs Elaine


Baker, Kenneth
Fletcher-Cooke, Charles
Kershaw, Anthony


Banks, Robert
Fookes, Miss Janet
Kilfedder, James


Beith, A. J.
Fowler Norman (Sutton C'f'd)
Kimball, Marcus


Berry, Hon Anthony
Fox, Marcus
King, Evelyn (South Dorset)


Biffen, John
Fraser, Rt Hon H. (Stafford &amp; St)
King, Tom (Bridgwater)


Biggs-Davison, John
Freud, Clement
Kitson, Sir Timothy


Blaker, Peter
Fry, Peter
Knight, Mrs Jill


Bowden, A. (Brighton, Kemptown)
Galbraith, Hon. T. G. D.
Lamont, Norman


Boyson, Dr Rhodes (Brent)
Gardiner, George (Reigate)
Lane, David


Bradford, Rev Robert
Gardner, Edward (S Fylde)
Langford-Holt, Sir John


Braine, Sir Bernard
Gilmour, Rt Hon Ian (Chesham)
Latham, Michael (Melton)


Brittan, Leon
Gilmour, Sir John (East Fife)
Lawrence, Ivan


Brown, Sir Edward (Bath)
Glyn, Dr Alan
Lawson, Nigel


Bryan, Sir Paul
Goodhart, Philip
Le Marchant, Spencer


Buchanan-Smith, Alick
Goodhew, Victor
Lester, Jim (Beeston)


Buck, Antony
Goodlad, Alastair
Lewis, Kenneth (Rutland)


Budgen, Nick
Gorst, John
Loveridge, John


Bulmer, Esmond
Gow, Ian (Eastbourne)
MacCormick, Iain


Burden, F. A.
Gower Sir Raymond (Barry)
McCrindle, Robert


Carlisle, Mark

McCusker, H.


Carson, John
Grant, Anthony (Harrow C)
Macfarlane, Neil


Chalker, Mrs Lynda
Gray, Hamish
MacGregor, John


Channon, Paul
Grieve, Percy
Macmillan, Rt Hon M. (Farnham)


Churchill, W. S.
Griffiths, Eldon
McNair-Wilson, M. (Newbury)


Clark, Alan (Plymouth, Sutton)
Grimond, Rt Hon J.
McNair-Wilson, P. (New Forest)


Clark, William (Croydon S)
Grist, Ian
Marshall, Michael (Arundel)


Clarke, Kenneth (Rushcliffe)
Grylls, Michael
Marten, Neil


Clegg, Walter
Hall, Sir John
Mates, Michael


Cockcroft, John
Hall-Davis, A. G. F.
Mather, Carol


Cooke, Robert (Bristol W)
Hamilton, Michael (Salisbury)
Maude, Angus


Cope, John
Hampson, Dr Keith
Mawby, Ray


Cormack, Patrick
Hannam, John
Maxwell-Hyslop, Robin


Corrie, John
Harrison, Col Sir Harwood (Eye)
Mayhew, Patrick


Costain, A. P.
Harvie Anderson, Rt Hon Miss
Meyer, Sir Anthony


Craig, Rt Hon W. (Belfast E)
Hastings, Stephen
Miller, Hal (Bromsgrove)


Crawford, Douglas
Havers, Sir Michael
Miscampbell, Norman


Critchley, Julian
Hawkins, Paul
Mitchell, David (Basingstoke)


Crowder, F. P.
Hayhoe Barney
Moate, Roger


Davies, Rt Hon J. (Knutsford)
Henderson Douglas
Molyneaux, James


Dean, Paul (N Somerset)
Hicks, Robert
Monro, Hector


Dodsworth, Geoffrey
Higgins, Terence L.
Montgomery, Fergus


Douglas-Hamilton, Lord James
Holland, Philip
Moore, John (Croydon C)


du Cann, Rt Hon Edward
Hooson, Emlyn
More, Jasper (Ludlow)


Dunlop, John
Hordern, Peter
Morgan, Geraint


Durant, Tony
Howe Rt Hon Sir Geoffrey
Morgan-Giles, Rear-Admiral


Eden, Rt Hon Sir John
Howell, David (Guildford)
Morris, Michael (Northampton S)


Edwards, Nicholas (Pembroke)
Howell, Ralph (North Norfolk)
Morrison, Charles (Devizes)


Elliott, Sir William
Howells, Geraint (Cardigan)
Morrison, Hon Peter (Chester)


Emery, Peter
Hurd, Douglas
Mudd, David


Evans, Gwynfor (Carmarthen)
James, David
Neave, Airey


Ewing, Mrs Winifred (Moray)
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Nelson, Anthony




Neubert, Michael
Ross, Stephen (Isle of Wight)
Taylor, Teddy (Cathcart)


Newton, Tony
Ross, William (Londonderry)
Tebbit, Norman


Normanton, Tom
Rossi, Hugh (Hornsey)
Temple-Morris, Peter


Nott, John
Rost, Peter (SE Derbyshire)
Thatcher, Rt Hon Margaret


Onslow, Cranley
Royle, Sir Anthony
Thomas, Dafydd (Merioneth)


Oppenheim, Mrs Sally
Sainsbury, Tim
Thomas, Rt Hon P. (Hendon S)


Osborn, John
Scott-Hopkins, James
Thompson, George


Page, John (Harrow West)
Shaw, Giles (Pudsey)
Thorpe, Rt Hon Jeremy (N Devon)


Page, Rt Hon R. Graham (Crosby)
Shaw, Michael (Scarborough)
Townsend, Cyril D.


Paisley, Rev Ian
Shelton, William (Streatham)
Tugendhat, Christopher


Pardoe, John
Shepherd, Colin
van Straubenzee, W. R.


Parkinson, Cecil
Shersby, Michael
Vaughan, Dr Gerard


Pattie, Geoffrey
Silvester, Fred
Viggers, Peter


Penhaligon, David
Sims, Roger
Wainwright, Richard (Colne V)


Percival, Ian
Sinclair, Sir George
Wakeham, John


Peyton, Rt Hon John
Skeet, T. H. H.
Walters, Dennis


Pink, R. Bonner
Smith, Cyril (Rochdale)
Warren, Kenneth


Powell, Rt Hon J. Enoch
Smith, Dudley (Warwick)
Watt, Hamish


Prior, Rt Hon James
Speed, Keith
Weatherill, Bernard


Raison, Timothy
Spence, John
Wells, John


Rathbone, Tim
Spicer, Jim (W Dorset)
Welsh, Andrew


Rawlinson, Rt Hon Sir Peter
Spicer, Michael (S Worcester)
Whitelaw, Rt Hon William


Rees, Peter (Dover &amp; Deal)
Sproat, Iain
Wiggin, Jerry


Rees-Davies, W. R.
Stainton, Keith
Wigley, Dafydd


Renton, Rt Hon Sir D. (Hunts)
Stanbrook, Ivor
Wilson, Gordon (Dundee E)


Renton, Tim (Mid-Sussex)
Stanley, John
Winterton, Nicholas


Rhys Williams, Sir Brandon
Steel, David (Roxburgh)
Wood, Rt Hon Richard


Ridley, Hon Nicholas
Steen, Anthony (Wavertree)
Young, Sir G. (Ealing, Acton)


Ridsdale, Julian
Stewart, Donald (Western Isles)
Younger, Hon George


Rifkind, Malcolm
Stewart, Ian (Hitchin)



Rippon, Rt Hon Geoffrey
Stokes, John
TELLERS FOR THE AYES:


Roberts, Michael (Cardiff NW)
Stradling Thomas, J.
Mr. Adam Butler and


Roberts, Wyn (Conway)
Taylor, R. (Croydon NW)
Mr. W. Benyon




NOES


Abse, Leo
Cryer, Bob
Graham, Ted


Allaun, Frank
Cunningham, G. (Islington S)
Grocott, Bruce


Anderson, Donald
Cunningham, Dr J. (Whiteh)
Hamilton, James (Bothwell)


Archer, Peter
Dalyell, Tam
Hamilton, W. W. (Central Fife)


Armstrong, Ernest
Davidson, Arthur
Hamling, William


Ashton, Joe
Davies, Bryan (Enfield N)
Hardy, Peter


Atkins, Ronald (Preston N)
Davies, Denzil (Llanelli)
Harper, Joseph


Atkinson, Norman
Davies, Ifor (Gower)
Harrison, Walter (Wakefield)


Bagier, Gordon A. T.
Davis, Clinton (Hackney C)
Hattersley, Rt Hon Roy


Barnett, Guy (Greenwich)
Deakins, Eric
Hatton, Frank


Barnett, Rt Hon Joel
Dean, Joseph (Leeds West)
Hayman, Mrs Helene


Bates, Alf
de Freitas, Rt Hon Sir Geoffrey
Healey, Rt Hon Denis


Benn, Rt Hon Anthony Wedgwood
Dell, Rt Hon Edmund
Heffer, Eric S.


Bennett, Andrew (Stockport N)
Dempsey, James
Hooley, Frank


Bidwell, Sydney
Doig, Peter
Horam, John


Bishop, E. S.
Dormand, J. D.
Howell, Denis (B'ham, Sm H)


Blenkinsop, Arthur
Douglas-Mann, Bruce
Hoyle, Doug (Nelson)


Boardman, H.
Duffy, A. E. P.
Huckfield, Les


Booth, Albert
Dunn, James A.
Hughes, Mark (Durham)


Boothroyd, Miss Betty
Dunnett, Jack
Hughes, Robert (Aberdeen N)


Bottomley, Rt Hon Arthur
Dunwoody, Mrs Gwyneth
Hughes, Roy (Newport)


Boyden, James (Bish Auck)
Eadie, Alex
Hunter, Adam


Bradley, Tom
Edelman, Maurice
Irving, Rt Hon S. (Dartford)


Bray, Dr Jeremy
Edge, Geoff
Jackson, Colin (Brighouse)


Brown, Hugh D. (Provan)
Edwards, Robert (Wolv SE)
Jackson Miss Margaret (Lincoln)


Brown, Robert C. (Newcastle W)
Ellis, Tom (Wrexham)
Janner, Greville


Brown, Ronald (Hackney S)
English, Michael
Jay, Rt Hon Douglas


Buchan, Norman
Evans, Ioan (Aberdare)
Jenkins, Hugh (Putney)


Butler, Mrs Joyce (Wood Green)
Evans, John (Newton)
Jenkins, Rt Hon Roy (Stechford)


Callaghan, Jim (Middleton &amp; P)
Ewing, Harry (Stirling)
John Brynmor


Campbell, Ian
Faulds, Andrew
Johnson, James (Hull West)


Canavan, Dennis
Fernyhough, Rt Hon E.
Johnson, Walter (Derby S)


Cant, R. B.
Flannery, Martin
Jones, Alec (Rhondda)


Carmichael, Neil
Fletcher, Raymond (Ilkeston)
Jones, Barry (East Flint)


Carter, Ray
Fletcher, Ted (Darlington)
Jones, Dan (Burnley)


Castle, Rt Hon Barbara
Foot, Rt Hon Michael
Judd, Frank


Clemitson, Ivor
Ford, Ben
Kaufman, Gerald


Cocks, Michael (Bristol S)
Forrester, John
Kelley Richard


Cohen, Stanley
Fowler, Gerald (The Wrekin)
Kerr, Russell


Coleman, Donald
Fraser John (Lambeth, N'w'd)
Kilroy-Silk, Robert


Colquhoun, Mrs Maureen
Freeson, Reginald
Kinnock, Neil


Concannon, J. D.
Garrett, John (Norwich S)
Lambie, David


Conlan, Bernard
Garrett, W. E. (Wallsend)
Lamborn, Harry


Cook, Robin F. (Edin C)
Gilbert Dr John
Lamond, James


Cox, Thomas (Tooting)
Ginsburg, David
Latham, Arthur (Paddington)


Craigen, J. M. (Maryhill)
Golding, John
Leadbitter, Ted


Cronin, John
Gould, Bryan
Lee, John


Crosland, Rt Hon Anthony
Gourlay, Harry
Lewis, Ron (Carlisle)







Lipton, Marcus
Padley, Walter
Stewart, Rt Hon M. (Fulham)


Litterick, Tom
Palmer, Arthur
Stott, Roger


Lomas, Kenneth
Park, George
Strang, Gavin


Loyden, Eddie
Parker, John
Strauss, Rt Hon G. R.


Luard, Evan
Parry, Robert
Summerskill, Hon Dr Shirley


Lyon, Alexander (York)
Pavitt, Laurie
Swain, Thomas


Lyons, Edward (Bradford W)
Pendry, Tom
Taylor, Mrs Ann (Bolton W)


McCartney, Hugh
Perry, Ernest
Thomas, Jeffrey (Abertillery)


McElhone, Frank
Phipps, Dr Colin
Thomas, Mike (Newcastle E)


MacFarquhar, Roderick
Prentice, Rt Hon Reg
Thomas, Ron (Bristol NW)


Mackenzie, Gregor
Prescott, John
Thorne, Stan (Preston South)


Mackintosh, John P.
Price, C. (Lewisham W)
Tierney, Sydney


Maclennan, Robert
Price, William (Rugby)
Tinn, James


McMillan, Tom (Glasgow C)
Richardson, Miss Jo
Tomlinson, John


McNamara, Kevin
Roberts, Albert (Normanton)
Torney, Tom


Magee, Bryan
Roberts, Gwilym (Cannock)
Urwin, T. W.


Mahon, Simon
Robertson, John (Paisley)
Varley, Rt Hon Eric G.


Marks, Kenneth
Roderick, Caerwyn
Wainwright, Edwin (Dearne V)


Marquand, David
Rodgers, George (Chorley)
Walden, Brian (B'ham, L'dyw'd)


Marshall, Dr Edmund (Goole)
Rodgers, William (Stockton)
Walker, Harold (Doncaster)


Marshall, Jim (Leicester S)
Rooker, J. W.
Walker, Terry (Kingswood)


Mason, Rt Hon Roy
Roper, John
Ward, Michael


Meacher, Michael
Rose, Paul B.
Watkins, David


Mellish, Rt Hon Robert
Ross, Rt Hon W. (Kilmarnock)
Watkinson, John


Mikardo, Ian
Rowlands, Ted
Weitzman, David


Millan, Bruce
Ryman, John
Wellbeloved, James


Miller, Dr M. S. (E Kilbride)
Sandelson, Neville
White, Frank R. (Bury)


Miller, Mrs Millie (Ilford N)
Sedgemore, Brian
White, James (Pollok)


Mitchell, R. C. (Soton, Itchen)
Selby, Harry
Whitehead, Phillip


Molloy, William
Shaw, Arnold (Ilford South)
Whitlock, William


Moonman, Eric
Sheldon, Robert (Ashton-u-Lyne)
Willey, Rt Hon Frederick


Morris, Alfred (Wythenshawe)
Shore, Rt Hon Peter
Williams, Alan (Swansea W)


Morris, Charles R. (Openshaw)
Short, Rt Hon E. (Newcastle C)
Williams, Rt Hon Shirley (Hertford)


Morris, Rt Hon J. (Aberavon)
Short, Mrs Renée (Wolv NE)
Williams, W. T. (Warringon)


Moyle, Roland
Silkin, Rt Hon John (Deptford)
Wilson, Alexander (Hamilton)


Mulley, Rt Hon Frederick
Silkin, Rt Hon S. C. (Dulwich)
Wilson, Rt Hon H. (Huyton)


Murray, Rt Hon Ronald King
Sillars, James
Wilson, William (Coventry SE)


Newens, Stanley
Silverman, Julius
Woodall, Alec


Noble, Mike
Skinner, Dennis
Wrigglesworth, Ian


Oakes, Gordon
Small, William
Young, David (Bolton E)


Ogden, Eric
Smith, John (N Lanarkshire)



O'Halloran, Michael
Snape, Peter
TELLERS FOR THE NOES:


Orbach, Maurice
Spearing, Nigel
Mr. John Ellis and


Orme, Rt Hon Stanley
Spriggs, Leslie
Mr. David Stoddart


Owen, Dr David
Stallard, A. W.

Question accordingly negatived.

It being after Twelve o'clock, Mr. DEPUTY SPEAKER proceeded, pursuant to order this day, successively to put the Questions on amendments moved by a Member of the Government of which notice had been given, relating to Clauses 1 to 18 and 50 and 56 and to Schedules 1 to 3 and 12.

Clause 7

EARLY SURRENDER OR CONVERSION OF LIFE POLICIES

Amendment made:
No. 21, in page 4, line 36, at end insert 'unless the body is wound up and the event is a surrender or conversion effected in connection with the winding-up'.—[Mr. Joel Barnett.]

Clause 17

SALES, ETC. AT UNDERVALUE OR OVERVALUE

Amendments made:

No. 29, in page 12, line 1, after 'or', insert:
'subject to subsection (5A) below'.

No. 30, in line 5, at end insert:
'(5A) If, in a case in which under subsection (5) above the parent body is by notice required to make available for inspection any books, accounts, documents or records of a body of persons resident outside the United Kingdom over which the parent body has control, it appears to the Board, on the application of the parent body, that the circumstances are such that the requirement ought not to have effect, the Board shall direct that the parent body need not comply with the requirement.
If, on such an application, the Board refuse to give a direction under this subsection, the parent body may, by notice in writing given to the Board within thirty days after the refusal, appeal to the Special Commissioners who, if satisfied that the requirement in question ought in the circumstances not to have effect, may determine accordingly.'

No. 32, in line 7, after 'transaction', insert 'or transactions'.

No. 33, in line 13, leave out 'any' and insert 'the relevant'.

No. 34, in line 13, after 'persons', insert:
'(that is to say, the trade in the course of which the transaction or transactions were effected)'.

No. 36, in line 18, at end insert:
'An inspector's authority for entering any premises under this subsection shall state the


name of the inspector and the name of the body of persons carrying on the trade in connection with which the premises are used'.—[Mr. Joel Barnett.]

Clause 18

RELIEF FOR INCREASE IN STOCK VALUES IN FINANCIAL YEAR 1973

Amendments made:

No. 37, in page 14, line 20, leave out 'three' and insert 'six'.

No. 38, in line 22, at end insert:
'(6A) In any case where—

(a) by virtue of subsection (2)(b) above, a company's 1973 accounting period consists of two or more accounting periods and the last of those periods (in this subsection referred to as "the relevant accounting period") coincides with a period of account, and
(b) the company makes a claim for relief under this section, and
(c) in the relevant accounting period the company incurs a loss in the trade referred to in subsection (1)(a) above,

then, notwithstanding that the relevant accounting period is less than 12 months, in relation to so much of the loss referred to in paragraph (a) above as would not have been incurred if the claim for relief under this section had not been made, subsections (2) and (3) of section 177 of the Taxes Act (carry back of losses against profits of preceding accounting periods ending within a specified time) shall have effect as if the time specified in the said subsection (3) comprised—

(i) so much of the 1973 accounting period as does not consist of the relevant accounting period; and
(ii) the period which ends immediately before the 1973 accounting period and is either equal in length to that period or 12 months, whichever is the shorter'.—[Mr. Joel Barnett].

Clause 50

RECIPIENT BODIES REFERRED TO IN FINANCE ACT 1972, SECTION 119

Amendment made:

No. 113, in page 38, line 2, leave out '25th' and insert '26th'.—[Mr. Joel Barnett.]

Schedule 2

LIFE POLICIES, LIFE ANNUITIES AND CAPITAL REDEMPTION POLICIES

Amendment made:

No. 118, in page 42, line 33, at end insert:
or, if he so elects, to the Special Commissioners

Amendment proposed, No. 128 in page 50, line 26, at end insert
(and if the policy is one falling within subsection (2) of section 394, those results shall follow under section 8 of this Act, whether or not a gain would be treated as arising on the surrender)".—[Mr. Joel Barnett.]

Question put, That the amendment be made:—

The House proceeded to a Division:—

Mr. Russell Kerr: (seated and covered): On a point of order, Mr. Deputy Speaker. Is it in order that the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) should be bullied in the way that I have just seen him being bullied to try to persuade him to withdraw from this rather stupid action?
Mr. John Ellis and Mr. David Stoddart were appointed Tellers for the Ayes but, no Member being willing to act as Teller for the Noes, Mr. Deputy Speaker declared that the Ayes had it.

Amendment accordingly agreed to.

Amendments made: No. 130, in page 50, line 35, leave out paragraph (b) and insert—
(b) either interest at a commercial rate is payable on the sum lent or the sum is lent to a full-time employee of the body issuing the policy for the purpose of assisting him in the purchase or improvement of a dwelling used or to be used as his only or main residence".

No. 134, in page 51, line 12, at end insert—
18A.—(1) Where such an excess is mentioned in paragraph (a) or (b) of section 395(1) or paragraph (a) of section 397(1) would be


treated as a gain arising in connection with a policy or contract and would form part of an individual's total income for the year of assessment in which the final year ends, a corresponding deficiency occurring at the end of the final year shall be allowable as a deduction from his total income for that year of assessment, so far as it does not exceed the total amount treated as a gain by virtue of section 395(1)(d) or 397(1)(c) on the previous happening of chargeable events.

'11 &amp; 12 Geo. 6. c. 38.
The Companies Act 1948.
In section 459(9)(c), the words from "subsection (4)" to "Act) of" and the word "other".'


No. 295, in page 139, line 46, at end insert—


1960 c. 22 (N.I.)
The Companies Act (Northern Ireland) 1960.
In section 403(9)(b), the words from "subsection (4)" to "Act) of" and the word "other".'

No. 296, in page 142, line 8, leave out '25th' and insert '26th'.—[Mr. Joel Barnett.]

Further consideration of the Bill, as amended, stood adjourned.

Bill, as amended, to be further considered this day.

Orders of the Day — VIOLENCE IN MARRIAGE

Ordered,
That Mr. Eric Moonman be discharged from the Select Committee on Violence in Marriage and that Mr. Ronald Atkins be added to the Committee.—[Mr. Walter Harrison.]

Orders of the Day — WEALTH TAX

Ordered,
That Mrs. Ann Taylor be discharged from the Select Committee on Wealth Tax and that Mr. John Cartwright be added to the Committee.—[Mr. Walter Harrison.]

ADJOURNMENT

Motion made and Question proposed, That this House do now adjourn.—[Mr. James Hamilton.]

Orders of the Day — WATER CHARGES (WALES)

12.13 a.m.

Mr. Roy Hughes: rose—[Interruption.]

Mr. Deputy Speaker (Mr. George Thomas): Order. Would hon. Members please leave in an orderly manner and not stand in front of the Table?

Mr. Hughes: I welcome this opportunity to raise the question of the water

(2) In this paragraph "final year" has the same meaning as in paragraph 9 above".—[Mr. Joel Barnett.]

Schedule 12

REPEALS

Amendments made: No. 294, in page 136, line 3, at end insert—

charges levied by the Welsh Water Authority on the borough of Newport. The Water Act 1973 was the work of the last Conservative Government, who went out of office in February last year after the debacle of the three-day working week and the confrontation with the miners. They were in office for three years and eight months and their main legislation fell into three sections.

First, there was the Industrial Relations Act, which has now been wiped off the statute book with hardly a whimper from the Opposition. Second, there was the European Economic Community legislation, which is now to be the subject of a referendum, three years later. Third, there was the reorganisation of local government, along with the reorganisation of water and health services.

Last Sunday in the Sunday Telegraph, Mr. Patrick Hutber, the Economic Editor, said that the reorganisation was "disastrous",
… quite possibly the single worst official decision since the war, with effects which are as devastating in Whitehall and the Treasury as they are upon the ground.
That is a formidable indictment from a paper which we have always recognised as—

Mr. Michael Roberts: They are all Socialists.

Mr. Hughes: Almost an official organ of the Conservative Party. But it appears that this view is now held by many Conservative Members.

Mr. Michael Roberts: That is why they are all here to support the hon. Member.

Mr. Hughes: Last Wednesday there was an Early Day Motion on the Notice Paper, signed by a number of hon. Members, headed by the hon. Member for Sudbury and Woodbridge (Mr. Stainton), which said:
That, in view of mounting disquiet regarding the structure, manning, salaries, efficiency and constantly increasing responsibilities of local government, this House appoints a Select Committee to appraise the situation before the recent reorganisation becomes ossified, and contemporaneous with the work of the Layfield Committee on local government finance.
I put down an amendment to the motion, pointing out that Conservative Members were now regretting the undue haste with which the last Conservative Government pressed their local government reorganisation proposals in the Local Government Act 1972 and their failure to take note of the then Opposition's warning that the financial arrangements and the devolution of central government to the regions should be decided upon first. The Minister who will be replying to the debate was one of the active Labour Members pressing that point of view, but he got very little joy from the Government of the day.
The criticism in the Sunday Telegraph is applicable to the borough of Newport. Before reorganisation, it was a reasonably efficient one-tier authority.

Mr. Michael Roberts: Does the hon. Gentleman agree that one of the benefits of the reorganisation of local government, whatever criticisms can be levelled at it, is that the social services departments have been so well organised on a comprehensive basis that they have embraced the whole level of social service development and have proved in many areas—and I hope in Newport—a great success?

Mr. Hughes: I assure the hon. Gentleman, without qualification, that the benefits to Newport of reorganisation are very thin on the ground.

Mr. Michael Roberts: Will the hon. Gentleman answer on the matter of social services?

Mr. Hughes: If the hon. Gentleman does not mind, I prefer to make my own speech.
The action of the Conservative Government was the worst single thing to happen to Newport since the end of the war. In

regard to water supplies, due to the initiative and imagination shown by the town council in generations past the town had provided itself with adequate supplies of water and with proper facilities for sewage disposal. We must not exaggerate these sorts of things because, after all, most of what we know now about sanitation, and so on, was known way back in the 1830s, in the time of Edwin Chadwick. Nevertheless, the Chief Executive of the Welsh Water Authority, Mr. H. H. Crann, in his circular letter of two weeks ago, pointed out that an inadequate level of services had been provided by many predecessor local authorities.
It seems that the Welsh Water Authority is now trying to make up the leeway too quickly, and areas such as Newport, Cardiff and Swansea are having to pay for it. This is just not good enough. Some areas have suffered from years of neglect. There has been skimping on their rates. What I have always felt about rates is that they should provide value for money, not skimping on services, because when good amenities and facilities are provided for citizens and ratepayers, they in turn are prepared to pay.
Newport at present is desperately trying to keep down the increase in its rates to 20 per cent., which is no more than is required to deal with inflation. But even if the borough and the Gwent County Council keep down the rate increases to that 20 per cent. figure, the effect of water and sewerage charges will be to increase rates by between 67 per cent. and 80 per cent.
The water authority has almost doubled its expenditure on sewerage, from £18 million to £35 million, and its expenditure on water has risen by nearly a half, from £23 million to £33·3 million. What is more, it has equalised its charges over the whole of its area in one go. In other reorganisations, of course, the equalisation has been spread over a period of perhaps five or even seven years. This happened when the South Monmouthshire Water Board and the Gwent Water Board were created. But the combined effect of the water authority's action is that Newport's bill for sewerage is jumping from £890,000 this year to £2½ million next year. If the reorganisation had not taken place, the bill to Newport would be half of that latter figure.
Perhaps the most evil principle of the 1973 Act, however, was that water was to be self-financing. That meant that a whole range of subsidies to the consumer on water and sewerage was withdrawn. That was despite intense opposition from the party which now forms the Government. My hon. Friend the Under-Secretary of State for Wales—the hon. Member for Merthyr Tydfil (Mr. Rowlands)—was prominent in that opposition. It was government by steamroller. We know that the driver of that steamroller has since been sacked. The authority is almost an autonomous body and the ratepayers are having to suffer accordingly. Newport, for instance, is the third largest town in Wales, but it has no representatives on the authority. That in itself is disgraceful.
It should be said that rating is a bad basis for levying a charge. We know that rating valuation was transferred from the local authorities to the Inland Revenue in 1948 to even up the various areas, but vast anomalies remain. For example, a three-bedroomed house in Newport has a rateable value 50 per cent. greater than a comparable house in Merthyr Tydfil. I would have thought that a different formula needs to be worked out. If we are to have equalisation, let us have it, but let us not have the artificial loading of a few areas.
To add insult to injury, Newport is now being called upon to contribute £17,000 per annum for 12 years as a contribution on a guaranteed basis for the completion of a sewerage scheme within the borough boundary. It seems that the Welsh Water Authority is having its cake and eating it. The borough should be treated as a single complex, but the authority is picking off small schemes within the borough which individually do not pass the test of viability. Under the Act the authority can claim extra rates. That is just not good enough.
What should now be done? Firstly, there should be Government assistance to those areas which are worst hit. Schedule 3 of the Act provides for that to be done. Secondly, there should be equalisation spread out over a period from five to perhaps seven years. There are many precedents for that.

Mr. Michael Roberts: Hear, hear.

Mr. Hughes: I am glad to have the agreement of the hon. Gentleman. I know that the ratepayers of his area have suffered in just the same way as have the residents of Newport, from the legislation of the Government which he supported. Official reports have also recommended that the equalisation should be spread out over a period of years. Perhaps more fundamental, equalisation should be spread out over the country as a whole. We have a ridiculous situation in respect of Welsh water. As my hon. Friend the Member for Brecon and Radnor (Mr. Roderick) has pointed out, the reservoirs in the Elan Valley in Radnorshire are almost on top of the people's doorways, but the people of Birmingham, whom the reservoirs are supplying, are paying considerably less for their water than are those people living at the edge of the reservoirs. There could be nothing more ridiculous than that. I sympathise with my hon. Friend the Member for Brecon and Radnor. He has been to the fore in his advocacy on this problem.

Mr. Michael Roberts: Where is he?

Mr. Hughes: My right hon. and learned Friend the Secretary of State for Wales, at Question Time on Monday, pointed out in a reply to my right hon. Friend the Member for Anglesey (Mr. Hughes) that the committee under Sir Goronwy Daniel that was set up to investigate this matter would be reporting in the next few days. We await with interest that report, and we wait for the Minister to reply. I hope that he has something of interest to tell us. Areas like Newport have fared badly. Councillors and ratepayers are fed up. Revolt is in the air. There has been talk of a refusal to collect the water rates. I am not advocating such a course, but something needs to be done urgently.

12.30 p.m.

The Under-Secretary of State for Wales (Mr. Edward Rowlands): The importance of the subject of water charges in Wales generally as well as in individual communities like Newport can be measured by the number of times we have returned to the issue during the past year. There can be no doubt in the mind of any hon. Member that the increased water service charges introduced


12 months ago and those which are now proposed for 1975–76 are without parallel in the history of the industry.
The context in which we discuss the issue, in particular in relation to Newport, is one of a water industry which has never before been afflicted with so many severe handicaps. There are, first, the twin evils of inflation and high interest rates. If these were not enough, the effects of the Water Act 1973 have been the last straw.
I will not bore my hon. Friend the Member for Newport (Mr. Hughes), who has mentioned my personal antipathy to the 1973 Act, by repeating our criticisms of the Act. They are well known and firmly on the record. I shall, however, mention one thing which has a firm bearing upon the position of the Welsh Water Authority and its decisions this year. I refer to the requirement that water authorities shall be self-supporting from charges. This has probably caused more difficulty than any other single factor. The removal of rate support from water and sewerage services had a sudden and dramatic effect, particularly on the rural areas whose need for subsidy from the rates was greatest. As a result, massive charge increases were visited on these areas in 1974–75.

Mr. Michael Roberts: The hon. Member for Newport (Mr. Hughes) criticised the legislation which was introduced by the Conservative Government. The Under-Secretary has said that he is on record as having opposed that legislation. It is no secret that when my party was in power, Labour Members made it clear that when they were returned to office they were prepared to make changes and that they would reorganise the structure of local government which we had introduced. After one year in office, what changes does the Minister intend to introduce? If he intends to introduce no changes, I ask him not to continue saying merely that the Tories introduced the 1973 Act. If he has nothing constructive to say, let him stop criticising the constructive changes that we introduced.

Mr. Rowlands: The Tories introduced very little in the way of constructive change. The hon. Gentleman's remarks were not exactly constructive. What we have been saying is that there were many

aspects of the 1973 Act which caused great offence to hon. Members on both sides. Nevertheless, for better or worse, this is the system that the Government and the authority have to operate. We cannot change it overnight.
We have had one great unheaval in administration. As my hon. Friend the Member for Newport said, we have had simultaneously an upheaval in the health service, in local government and in water. To throw the new administration of these services into further upheaval would obviously be a matter of considerable concern.
My hon. Friend raised the particular problem of areas like Newport. When the Welsh Water Authority took over responsibility in April 1974, it faced a very difficult situation. It inherited estimates prepared by local authorities which were based on wide-ranging assumptions with great variations from place to place. At the same time, local government had been reorganised. The Welsh Water Authority thus had no practical choice but to impose its rates for 1974–75 based on the cost of supplying water in each division of the authority in 1973–74, plus a uniform percentage increase to cover increased costs. Added to that was the effect of losing the rate subsidy. Hon. Members will realise that those areas which most needed help were the ones which suffered the largest increase.
I mention those matters because I am sure that my hon. Friend will not wish to consider merely the problems of his own community but will consider the position nationally as well as locally.
My hon. Friend has described the situation facing Newport in 1975–76. Invidious comparisons can be and have been made. I must tell my hon. Friend of the present position, and of the present plight of many communities in Wales as a result of the 1973 Act. Let me contrast Newport's water charge for 1974–75 of 6·6p in the pound with that of Cardigan and Radnor and North Brecon at 20p in the pound, Anglesey at 18·8p in the pound, Merioneth at 18p in the pound, and, if I may be forgiven for mentioning my own area, Taf Fechan at 16·8p in the pound. Indeed, of the 17 water division areas, Newport, as part of Gwent division, had one of the lowest water rates of all in 1974–75.
A similar pattern of charges can be found in relation to sewerage and general services. I assure my hon. Friend, therefore, that he is not alone in feeling strongly about the problem of water charges. Many other communities have suffered huge increases during the course of this financial year.
I turn now to the future. My hon. Friend spoke of the burden on his community, and the possibility of Government assistance under one of the provisions of the Water Act. I remind him—this is in answer to the hon. Gentleman, also—that when we found the situation, as we did, arising from the 1973 Act, we acted swiftly to try to relieve the domestic ratepayer of the burden. In Wales in 1974–75 generous domestic relief was awarded, double that in England, to offset, among other things, the effect of water charges. All consumers in the whole of Wales benefited from that, but, ironically, those in urban areas were particularly well shielded from the increases of 1974–75. That was our immediate answer to the problem with which we were confronted.
In some districts—the hon. Gentleman represents one of them—ratepayers had to pay less in 1974–75 in total general rates, including water and sewerage, than they did in 1973–74. For example, in Newport the total net demand on domestic consumers was reduced by 6·8p in the pound as a result of the change which we made for domestic rate relief. In Cardiff the total net demand was reduced by 7·1p in the pound. That was, I am sorry to say, in sharp contrast to what happened in other communities in 1974–75.
I come now to the problem for 1975–76. The Welsh Water Authority faces an even more difficult situation. My hon. Friend tended to suggest that the authority has had something of a spending spree. This has been put to us also by letters from Newport and other places. I should put the record straight.
There was a deficit of £5 million on 1974–75, which had to be made good, as well as the need to avoid a similar deficit for 1975–76. Loan charges and inflation accounted for a further increase of £15½ million. Quite clearly these increases could not be passed on to the communi-p
ties which had borne the heaviest burden in 1974–75. These increased revenue requirements are firmly in the class of "inescapable commitments".
The Welsh Water Authority has not been given carte blanche for new capital spending. Its programmes for 1975–76 are generally confined to priority works required for reasons of public health and for new housing, as well as to completing schemes started by its predecessors. Indeed, I have frequently had to explain to hon. Members why schemes in their own constituencies cannot go ahead.
I understand and, indeed share, the dismay expressed by my hon. Friend about the steep rise in charges in Newport and other urban areas. I respect the force of the argument that it might have been preferrable to phase the move towards equalisation. But each authority has to deal with the circumstances in which it finds itself. My hon. Friend referred to the problems of my hon. Friend the Member for Brecon and Radnor (Mr. Roderick), and his constituency has certainly faced massive problems over water charges. If the Welsh Water Authority had not chosen to equalise it would have had to raise heavier charges upon those communities which bore the brunt of the increase last year. It did not consider that was fair, or equitable, but that was part and parcel of the principle of the 1974 Act. Similarly, if a phased introduction of equalisation had been made, this, too, would have maintained a considerable discrepancy in rates of water charges between community and community.
The authority faced the nightmare dilemma that if charges were not increased in an area such as Newport, other areas would have to suffer more than they have suffered in 1974–75. We believe that the authority was right to abandon the system adopted in 1974–75. It decided to do so and the decision was its own, taken under the powers given to it under the 1973 Act. It therefore moved to full equalisation in one stage.
My hon. Friend has advanced two main arguments for phasing equalisation over a number of years. First, he suggested that the authority should have followed the advice of the recent Jukes


Report, which advised caution in this matter. The Jukes Report was advisory, and regional water authorities were not bound to follow it
The question for the authority was whether an equalised system would be more—

The Question having been proposed after Ten o'clock on Tuesday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at seventeen minutes to One o'clock.